Which term describes merchandise that is lost or stolen from a store?

Which term describes merchandise that is lost or stolen from a store?

• A. Shrinkage
• B. Perpetual inventory control
• C. Physical Inventory Control
• D. Unit Control

Answer: (A)

Shrinkage is the term used for merchandise that disappears from a store due to theft, loss, or damage. It represents the gap between what the inventory records show and what is actually on hand, and it directly reduces profit because those goods are counted as sold or lost without generating revenue. Causes can include shoplifting, employee theft, administrative errors, vendor fraud, and damaged or misplaced items. Understanding shrinkage helps retailers focus on loss-prevention measures like better security, accurate counting, and tighter receiving and stocking procedures. The other terms describe how inventory is tracked or counted rather than the loss itself: perpetual inventory control refers to continuously updating quantities as transactions occur; physical inventory control is the process of counting stock to verify records; and unit control relates to managing inventory by individual units. None of these describe the actual lost or stolen merchandise the way shrinkage does.

Shrinkage is the term used for merchandise that disappears from a store due to theft, loss, or damage. It represents the gap between what the inventory records show and what is actually on hand, and it directly reduces profit because those goods are counted as sold or lost without generating revenue. Causes can include shoplifting, employee theft, administrative errors, vendor fraud, and damaged or misplaced items. Understanding shrinkage helps retailers focus on loss-prevention measures like better security, accurate counting, and tighter receiving and stocking procedures.

The other terms describe how inventory is tracked or counted rather than the loss itself: perpetual inventory control refers to continuously updating quantities as transactions occur; physical inventory control is the process of counting stock to verify records; and unit control relates to managing inventory by individual units. None of these describe the actual lost or stolen merchandise the way shrinkage does.