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Companies keep detailed records of the cost of each inventory purchase and sale.These records continuously – perpetually – show the inventory that should be onhand for every item. Companies that sell products with fixed prices use perpetualinventory systems.A perpetual inventory system provides better control over inventories than aperiodic inventory system (we will explain in chapter2). Since the inventory recordsshow the quantities that should be on hand, the company can count the goods at anytime to see whether the amount of goods actually on hand agrees with the inventoryrecords. If shortages are uncovered, the company can investigate immediately.


Original text

Companies keep detailed records of the cost of each inventory purchase and sale.These records continuously – perpetually – show the inventory that should be onhand for every item. Companies that sell products with fixed prices use perpetualinventory systems.A perpetual inventory system provides better control over inventories than aperiodic inventory system (we will explain in chapter2). Since the inventory recordsshow the quantities that should be on hand, the company can count the goods at anytime to see whether the amount of goods actually on hand agrees with the inventoryrecords. If shortages are uncovered, the company can investigate immediately.

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