Question: Assume that Bernard Office Equipment in Question 1 experienced an abnormal inventory shrinkage of $315,750. It has decided to record the abnormal inventory shrinkage so that it would be separately disclosed on the income statement. What account would be debited for the abnormal inventory shrinkage?
1. Bernard Office Equipment, which uses a perpetual inventory system, experienced a normal inventory shrinkage of $19,290.
(a) What accounts would be debited and credited to record the adjustment for the inventory shrinkage at the end of the accounting period?
b) What are some causes of inventory shrinkage?