Which statement describes the main purpose of updating stock quantities after every purchase or sale?

• A. Physical inventory system.
• B. Perpetual inventory system.
• C. Just-in-time system.
• D. Periodic stock-check.

Answer: (B)

Updating stock quantities after every purchase or sale is the hallmark of a perpetual inventory system, which keeps real-time records of how much inventory you have on hand and the associated value. Because each transaction is entered as it happens, you always know current stock levels, can calculate cost of goods sold immediately, and can detect discrepancies or shrinkage promptly. This contrasts with periodic stock-check methods, where updates occur only at set intervals after counting stock, leaving gaps in real-time visibility. Just-in-time focuses on minimizing inventory through timing and replenishment, not on how stock levels are tracked continuously. Physical inventory counts are typically performed to verify records and adjust balances, rather than to drive ongoing updates after every sale or purchase.