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The accounting system whereby the inventory is updated after every purchase or sale is recognized as perpetual inventory. With each buy or sale transactions, the perpetual inventory system requires being continually updating. In a card or piece of paper, a particular account for each type of stock is kept up to record the purchase and sale of each stock item throughout the year. By preserving the general ledger accounts for all inventory items, the system is incorporated into accounting records.
The perpetual inventory system is fairly a remarkable topic if a scholar is commerce or a management graduate. But for the students, who are from diverse academic background face complexity in understanding its terms as it is an unfamiliar topic for them. Students pursuing the subject should be conscious of the vastness and difficulty of perpetual inventory. It needs particular attention as it is fairly critical to understand.
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There are few of the benefits of perpetual inventory system which the students need to study in this course. Few of them are mentioned below-
Under the perpetual inventory system, for every transaction, a business organization incessantly needs updating its stock accounts. Such transaction may be an add-on to or deduction from the inventory. Such undertakings include-
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