Tag Archives: Perpetual Inventory System

What is Perpetual Inventory System? A company using a perpetual inventory system keeps a continuous record of the physical quantities in its inventory. It registers the purchase or production, and use of each item of inventory in detailed subsidiary records. However, it often only records units without including costs. A …

In a perpetual inventory system, companies keep detailed records of the cost of each inventory purchase and sale. These records continuously—perpetually—show the inventory that should be on hand for every item. For example, a Ford dealership has separate inventory records for each automobile, truck, and van on its lot and showroom floor. Similarly, …