Question

Under perpetual inventory system, inventory is
valued
OPTIONS
a.
Continuously
b. Yearly
oc
Half yearly
O d.
None of the above​

Answer 1

ANSWER :

Under perpetual inventory system, inventory is valued

a. Continuously ✓

b. Yearly

c. Half yearly

d. None of the above

• Under the perpetual inventory system, a business firm updates its inventory on a continuous basis, i.e, continuously.

MORE TO KNOW :

➲ Perpetual Inventory System :-

Perpetual Inventory system is an inventory system under which a business firm updates the inventory of the business on a continuous basis.

• As and when there is a movement of an item of inventory, immediately record of such inventory is updated with the quantity and value and the balancing quantity and value of inventory is reflected in the record.

• Under this system, record of quantities and corresponding values for all purchases, issues to the production process, issues to other departments, scrapes and sales are maintained continuously.

➲ Advantages of Perpetual Inventory System :-

• [1] This system facilitates rigid control over stock materials in the business

• [2] This inventory system gives upto date details about materials in stock in the business.

• [3] This system assists to minimize pilferage and fraudulent practices in the business concern.

• [4] This system enables to reconcile the stock records and document for accuracy.

• [5] This inventory system helps to take the important decisions for corrective actions.