alleryWhich of these is the principal advantage of perpetual inventory system?
ANo need for physical count
BCheaper than periodic system
CContinuous control over stock
DNo requirement of ledgering
Answer & Solution
Correct answer: C. Continuous control over stock
1. Perpetual system tracks each receipt and issue, so inventory levels are known any time.
2. This enables continuous control: reorder triggers, loss detection and audit checks.
3. It is more expensive than periodic and still requires periodic physical verification.
_Source: ICAI BoS Foundation Paper 1, Ch 4 "Inventories", §4.3 table_
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