Which of the following factors would suggest the use of a perpetual inventory system?
A) A small company.
B) A high volume of many different, low-cost items.
C) A desire to minimize record-keeping requirements.
D) Only annual reporting is required.

Question

Quizplus · Accepted Answer

A perpetual inventory system is best suited for businesses that deal with a high volume of many different, low-cost items. This is because it enables continuous tracking of inventory levels, which is necessary for maintaining optimal stock levels and minimizing the risk of stockouts. A small company or a desire to minimize record-keeping requirements does not necessarily require the use of a perpetual system. Similarly, the requirement for only annual reporting does not provide enough information to determine the most suitable inventory system for the business.

Which of the Following Factors Would Suggest the Use of a Perpetual