Inventory Shrinkage: Adjustments and Accounting for Losses

The video tutorial discusses inventory adjustments, focusing on inventory shrinkage due to theft or deterioration. It emphasizes the importance of accurate financial statements by comparing physical inventory counts with recorded amounts. The tutorial explains how to adjust inventory records and make journal entries for inventory loss using the cost of goods sold (COGS) account.

Explain the journal entry process for recording inventory loss.

What does COGS stand for and how is it related to inventory adjustments?