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perpetual inventory count

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › perpetual inventory count

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
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    Posts
  • January 25, 2021 at 3:31 pm #607977
    xiaoyueyue
    • Topics: 3
    • Replies: 18
    • ☆

    Hi

    Could you help me with a query on perpetual inventory count please?

    Is perpetual inventory count a random inventory count? Does this mean not all inventory will be counted under perpetual inventory system?

    Many thanks

    January 26, 2021 at 8:05 am #608039
    Kim Smith
    Keymaster
    • Topics: 91
    • Replies: 6211
    • ☆☆☆☆☆

    Short answer is “no” to both your questions.
    This is assumed knowledge of MA/F2.

    It is inventory records that are described as perpetual when they show every movement in/out and balance.

    Perpetual records facilitate “continuous stock-checking” i.e. counting items at any time.

    For a continuous stock-checking system to be an effective control, all items must be counted at least once a year – all counts must be documented – and the follow-up of all discrepancies documented and resolved.

    If the auditor’s testing of the effectiveness of stock-checking is satisfactory, there will be no need for a full physical count at the year end as quantities can be taken to be the balances on the inventory records. If the control is lax and not effective, a full physical count would be required to ascertain year-end quantities.

    January 26, 2021 at 9:18 am #608055
    xiaoyueyue
    • Topics: 3
    • Replies: 18
    • ☆

    Thank you very much for your help. It is very clear now.

    January 26, 2021 at 11:43 am #608089
    Kim Smith
    Keymaster
    • Topics: 91
    • Replies: 6211
    • ☆☆☆☆☆

    You are very welcome!

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    Posts
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  • The topic ‘perpetual inventory count’ is closed to new replies.

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