Question: In the deduction method, goods not in inventory are assumed to have been sold. Sometimes goods are stolen, damaged, or spoiled. Therefore, the assumption that

In the deduction method, goods not in inventory are assumed to have been sold. Sometimes goods are stolen, damaged, or spoiled.

Therefore, the assumption that goods not in the closing inventory were sold [is / is not] necessarily valid. However, steps are taken to discover and record this shrinkage .

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