Business Finance
addition inventory costing methods

Question Description

Need help with my Accounting question - I’m studying for my class.

 (3) risks and three (3) benefits of using the perpetual inventory management system. Discuss the main types of inventory errors that could occur using the perpetual inventory system, and the major impact to the balance sheet and income statement

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Final Answer

benefits:

allows for accurate restocking

uncovers shrinkage and theft

better for small businesses that can sufficiently get by with just a cash register and simple accounting procedures


risks:

increased accuracy issues

more likely to have technology problems with this

its not an ideal system if you sell services rather than products

Prashant S (1995)
University of Virginia

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