Perpetual inventory system is defined as.

Perpetual inventory system is defined as.

• A. A system that updates only at year-end
• B. An inventory system that keeps a running computerized record of merchandise inventory
• C. An inventory system that relies on physical counts
• D. An inventory system that does not track quantities

Answer: (B)

Perpetual inventory is all about updating inventory records continuously as transactions occur. In this system, the quantity on hand and the cost of goods sold are updated every time you record a purchase, a sale, or a return, typically using computerized records. This gives real-time visibility into exactly how much stock you have and what it costs. It contrasts with updating only at year-end (periodic inventory) or relying on physical counts to determine balances. It also maintains quantities, not ignores them. So the description that best fits is a system that keeps a running computerized record of merchandise inventory.

Perpetual inventory is all about updating inventory records continuously as transactions occur. In this system, the quantity on hand and the cost of goods sold are updated every time you record a purchase, a sale, or a return, typically using computerized records. This gives real-time visibility into exactly how much stock you have and what it costs. It contrasts with updating only at year-end (periodic inventory) or relying on physical counts to determine balances. It also maintains quantities, not ignores them. So the description that best fits is a system that keeps a running computerized record of merchandise inventory.