When a company is evaluating whether or not to use a perpetual vs.a periodic inventory system the following statement is most accurate:
A)A perpetual inventory system provides far superior information and should be used at any cost.
B)A periodic system is inferior and should never be used if possible.
C)The cost of the system used should be measured against the benefits it provides.
D)Both systems are equally good.

Question

Quizplus · Accepted Answer

The cost of the inventory system should be weighed against the benefits it provides. A perpetual inventory system provides ongoing, real-time tracking of inventory levels and can help identify issues such as theft or spoilage quickly. However, it can be more expensive to implement and maintain. A periodic system may be more cost-effective, but it only provides a snapshot of inventory levels at specific points in time. Ultimately, the decision should be based on the company's budget and inventory management needs.

When a Company Is Evaluating Whether or Not to Use