Which statement best describes a perpetual inventory system?

• A. The schedule for employee shifts.
• B. The quantity of each product that should be in storage.
• C. The total value of inventory on hand at year end.
• D. The number of suppliers used.

Answer: (B)

In a perpetual inventory system, inventory records are updated every time a purchase or sale occurs, so you always know the exact quantity of each item that should be on hand. That real-time view of on-hand stock is why describing the quantity of each product that should be in storage is the best fit. It captures the ongoing tracking of units across all items, not just a single point in time.

The other statements describe things unrelated to how inventory is tracked: scheduling employee shifts isn’t about stock levels; reporting the total value at year end is more about a snapshot from a counting method rather than continuous tracking; and the number of suppliers concerns sourcing rather than on-hand quantities.