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Perpetual vs. Periodic Inventory
Companies track inventory by using the perpetual
(real time tracking) or periodic inventory methods. However, even the best
perpetual systems need to be verified by physical counts. All companies have
shrinkage and scrap items that reduce inventory and need to be accounted
for. Companies usually don’t disclose how frequently physical inventory
counts are conducted, but the company’s owners should really have this
information. It would be a nice touch for the Accountants to add this to
their disclosure requirements.
Click here for information on:
-Focus on the Profit Margins
-Inventory Accounting Calculation
-Lower of Cost or Market
-Inventory Categories
-Inventory Turnover Ratio |
