MANAGEMENT

Detailed explanation-1: -A perpetual inventory system is a system used to track and record stock levels, in which every purchase and sale of stock is logged automatically and immediately. In this system, every time a transaction takes place, the software records a change in inventory levels in real-time.

Detailed explanation-2: -What Is Perpetual Inventory? Perpetual inventory is a continuous accounting practice that records inventory changes in real-time, without the need for physical inventory, so the book inventory accurately shows the real stock.

Detailed explanation-3: -Answer and Explanation: The statement is TRUE. In the perpetual inventory system, inventory purchases are recorded in the inventory asset balance sheet account, and the income statement expense (Cost of Goods Sold) is only recorded as and when goods are sold.

Detailed explanation-4: -Perpetual inventory systems are superior to older periodic inventory systems because they allow for immediate tracking of sales and inventory levels for individual items, which helps to prevent stockouts.

Detailed explanation-5: -The perpetual inventory system keeps track of inventory balances continuously. This is done through computerized systems using point-of-sale (POS) and enterprise asset management technology that record inventory purchases and sales.