The perpetual inventory method of tracking inventory is considered superior to the periodic method because the perpetual method:
A) makes calculations easier and less technology can be deployed.
B) tells what inventory a company should have at any point in time.
C) saves a company from ever having to count the goods in inventory.
D) is more consistent with how companies calculated inventory in the past.

Question

Quizplus · Accepted Answer

The perpetual method allows for real-time tracking and provides information on inventory levels at any point in time, making it easier for companies to maintain optimal inventory levels and prevent stockouts or overstocking. It does require technology to be deployed, but this is viewed as an advantage rather than a disadvantage. Option A is incorrect because the perpetual method is not necessarily easier for calculations, and option C is incorrect because physical counting may still be necessary for reconciliation purposes. Option D is also incorrect as the perpetual method represents a more advanced way of calculating inventory levels.

The Perpetual Inventory Method of Tracking Inventory Is Considered Superior