The accounting records for Sports-R-Us, a superstore targeted at armchair athletes, showed that it had bought and received $1,830,000 worth of merchandise. An actual count of the merchandise in the store showed only $1,644,000 worth of merchandise in stock. What other information is needed to calculate inventory shrinkage?
A) The store's annual profit
B) The store's profit margin
C) The store's current assets
D) The store's inventory turnover rate
E) The store's retail sales during the period

Question

Quizplus · Accepted Answer

Inventory shrinkage is the difference between the recorded value of inventory (at retail prices) based on merchandise bought and received and the value of the actual inventory (at retail prices) in stores and distribution centers, divided by retail sales during the period.

The Accounting Records for Sports-R-Us, a Superstore Targeted at Armchair