The client's physical count of inventories is lower than the inventory quantities in the perpetual records.This could be the result of a failure to record:
A)Purchases.
B)Purchase discounts.
C)Sales.
D)Sales discounts.

Question

Quizplus · Accepted Answer

A lower physical count compared to the perpetual records often indicates that sales transactions have been recorded in the accounting system (reducing the inventory balance in the records) but the physical inventory has not been correspondingly reduced because the goods have not actually been shipped or delivered to customers. This discrepancy does not directly relate to the recording of purchases, purchase discounts, or sales discounts, as these would affect the cost recorded for inventory rather than the quantity.

The Client's Physical Count of Inventories Is Lower Than the Inventory