Under the perpetual inventory system an inventory variance can be calculated as the difference between:

Question

Quizplus · Accepted Answer

The perpetual inventory system provides a continual record of inventory transactions, so the inventory account should reflect the actual physical inventory on hand. Any difference between the inventory account balance and the physical stocktake can be calculated as an inventory variance. Therefore, choice B is the correct answer. Choices A and C do not accurately reflect the perpetual inventory system, while choice D is incorrect as inventory losses can still be calculated in a perpetual inventory system.

Under the Perpetual Inventory System an Inventory Variance Can Be