Shrinkage Definition - What is Shrinkage?

Shrinkage definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Shrinkage can be defined as: Inventory losses that occur as a result of theft or deterioration. Shrinkage is the reduction of inventory that is not due to the sale of inventory. Shrinkage could be the result of theft, loss, or spoilage. In a perpetual inventory system companies will still need a physical count of inventory do determine shrinkage. In a periodic inventory system shrinkage can be more difficult to determine. Estimates of what the physical inventory should be can be used to estimate the level of shrinkage.
Why Learn Accounting - Financial Accounting / Managerial Accounting
101 Double Entry Accounting System Explained - Accounting Equation
101 Cash vs Accrual - Cash Method / Accrual method differenc
101 Revenue Recognition Principle
Double Entry Accounting System Explained - Balance Sheet
101 Income Statement Introduction
101 Accounting Objectives - Relevance Reliability Comparability
101 Transaction Rules - Accounting Equation
101 Transaction Throught Process / Steps - Accounting Equation
101 Owner Deposits Cash Transaction Accounting Equation
101 Work Completed for Cash Transaction Accounting Equation
100.110 Pay Employee with Cash Transaction Accounting Equati
200 Debits & Credits Normal Balance - Double Entry Accounting Sy
200 Debits & Credits - One Rule to Rule Them All