Which inventory system provides a continuous record of inventory and cost of goods sold, updating these accounts after each purchase or sale?

• A. Just-in-time inventory system
• B. Perpetual inventory system
• C. Periodic inventory system
• D. Specific identification method

Answer: (B)

Verified step by step guidance

1. Understand the key characteristics of each inventory system mentioned in the problem: Perpetual inventory system, Periodic inventory system, Just-in-time inventory system, and Specific identification method.
2. Learn that the Perpetual inventory system updates inventory and cost of goods sold accounts continuously after each purchase or sale, providing real-time tracking of inventory levels.
3. Contrast this with the Periodic inventory system, which updates inventory and cost of goods sold accounts only at the end of an accounting period, not after each transaction.
4. Recognize that the Just-in-time inventory system focuses on minimizing inventory levels by ordering goods only as needed, and does not inherently provide continuous updates to inventory records.
5. Understand that the Specific identification method tracks individual items of inventory and assigns costs based on the specific item sold, but it does not inherently provide continuous updates to inventory and cost of goods sold accounts like the Perpetual inventory system does.