Which inventory method involves counting items at intervals rather than updating continuously?

Which inventory method involves counting items at intervals rather than updating continuously?

• A. Perpetual inventory
• B. Physical inventory
• C. Periodic inventory
• D. Just-in-time inventory

Answer: (C)

The main idea here is how inventory records are updated over time. A perpetual inventory system updates the records every time a purchase or sale occurs, giving a real-time view of how many items are actually on hand. In contrast, a periodic inventory system doesn’t update the records with each transaction. Instead, it relies on a counting process at the end of a set period—the physical count—to determine how many items remain and to adjust the records accordingly. This periodic counting, often done monthly or quarterly, is exactly what the question describes. It’s how you verify and determine ending inventory and cost of goods sold without continuously updating the inventory balance. Just-in-time focuses on minimizing inventory and coordinating deliveries, not on how often inventory is counted.

The main idea here is how inventory records are updated over time. A perpetual inventory system updates the records every time a purchase or sale occurs, giving a real-time view of how many items are actually on hand. In contrast, a periodic inventory system doesn’t update the records with each transaction. Instead, it relies on a counting process at the end of a set period—the physical count—to determine how many items remain and to adjust the records accordingly. This periodic counting, often done monthly or quarterly, is exactly what the question describes. It’s how you verify and determine ending inventory and cost of goods sold without continuously updating the inventory balance. Just-in-time focuses on minimizing inventory and coordinating deliveries, not on how often inventory is counted.