CA Intermediate · Cost and Management Accounting · Material Cost
Which of the following is a feature of the perpetual inventory system?
Perpetual inventory means stock records are updated continuously for receipts and issues, and physical verification is done on a continuing basis through the year. Counting only at year end is periodic stock taking, not perpetual inventory.
- AStock records are updated continuously and physical stock is verified through continuous stock taking during the yearCorrect
- BStock is counted only once, at the end of the financial year
- CStock is valued only at selling price
- DStock records are kept only for finished goods
Explanation
Perpetual inventory combines continuous recording of receipts and issues with continuous stock taking, so discrepancies are detected through the year. Counting only at year end describes periodic stock taking.
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