Physically counting inventory is normally done at least annually in retail companies. The physical count is then compared to the quantity on hand in the accounting system.

-List two events that would make the physical count of a specific item less than the quantity reported in the accounting system.

-List two events that would make the physical count greater than the reported quantity.

-Explain what types of investigation or reconciling activities the company might perform before they actually make an adjusting journal entry in the system.