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

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The perpetual inventory system continuously updates the inventory balance in the ledger as items are bought and sold. Therefore, an inventory variance can be calculated as the difference between the balance of the inventory account in the ledger and the total of the physical stocktake. This identifies any discrepancies that exist between the accounting records and the actual inventory count. Option A is incorrect because it only considers the purchases and ending inventory, while Option B is incorrect because it only considers the beginning and ending inventory. Option D is incorrect because the perpetual inventory system allows for the calculation of inventory losses.

Under the Perpetual Inventory System an Inventory Variance Can Be