ShrinkageA$)$B$)$C$)$D$)$E$)$Does not include the theft of merchandiseIs able to be directly measured by a perpetual inventory systemIs recognized by crediting Cost of Goods SoldCan arise because of theft and deterioration of merchandiseAll of the choices are correctThe consistency principleA$)$B$)$Requires a company to use the same accounting methods period after period Requires a company to use one cost flow assumption exclusively for all productsC$)$ Allows a company to change its cost flow assumption period after period in order to maximize net incomeD$)$ Is also called the matching principleE$)$ Allows a company to change its cost flow assumption period after period in order to minimize income taxesPhysical counts of inventoryA$)$ Are not necessary under the perpetual systemB$)$C$)$Are necessary to adjust for shrinkageShould be taken at least once a monthD$)$ Are necessary to adjust for shrinkage and should be taken at least once a monthE$)$ Are not necessary under the perpetual system and should be taken at least once a monthInternal control procedures:A$)$ Eliminate the risk of loss.B$)$ Include policies and procedures to safeguard assets.C$)$ Prevent unavoidable losses.D$)$ Both eliminate the risk of loss and include policies and procedures to safeguard assets.E$)$ All of the choices are correct.a