Question

Why do the vast majority of firms use the perpetual method?

Why do the vast majority of firms use the perpetual method?

Homework Answers

Answer #1

Answer : Vast majority of firms use the perpetual method the reasons of which are as follows:

  • Perpetual method is a proactive way to prevent stock from running out so as to maintain the reorder level.
  • Perpetual method allows business owners to centralise the inventory management system.
  • Provides accuracy in inventory management.
  • Give information about discounts, purchases, purchase return etc.
  • Provides useful and reliable information to users.
  • It reduces physical inventory count.
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