Question

post your thoughts on Perpetual Inventory. For what types of products do you think it would be advantageous to keep a perpetual inventory and why. This post must be at least 100 words, as I’m looking for well thought out discussions. Also, make sure to respond to at least one of your fellow student’s posts.

Answer 1

Ans.: PERPETUAL INVENTORY: As the name itself suggests that Inventory when taken as "Perpetual" the system for valuation is known as Perpetual Inventory System. The Newly developed system is highly gainful from the old one system of periodic inventory system, under which working is stopped & physical counts are taken to identify the Inventory Level at specific point of time at intervals. Its a system which allows immediate tracking of sales and offcourse inventory level, so as to save from awkward scenerio of stock stockkouts. As the System is Online one, we dont face stockouts. Inventory we can access anytime , being online availability of it. In terms of advantages, it is far superior than any other systems. Soon any sale occurs, it gives effect to it, known as point of sale system which reduces inventory and the effect of cost of sales & expenses account. The systems avoid heavy costs of physical counts and instead of that uses reoccuring counts of products in maintaining the Inventory.