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Under the perpetual inventory system, an entity continually updates its inventory records to

account for additions to and subtractions from inventory for such activities as received

inventory items, goods sold from stock, and items picked from inventory for use in the

 production process. Thus, a perpetual inventory system has the advantages of both providing

up-to-date inventory balance information and requiring a reduced level of physical inventory

counts. However, the calculated inventory levels derived by a perpetual inventory system

may gradually diverge from actual inventory levels, due to unrecorded transactions or theft,

so you should periodically compare book balances to actual on-hand quantities.

Perpetual inventory is by far the preferred method for tracking inventory, since it can yield

reasonably accurate results on an ongoing basis, if properly managed. The system works best

when coupled with a computer database of inventory quantities and bin locations, which is

updated in real time by the warehouse staff using wireless bar code scanners, or by sales

clerks using point of sale terminals. It is least effective when changes are recorded on

inventory cards, since there is a significant chance that entries will not be made, or will be

made incorrectly.

Balance sheets complete the sequence of accounts, showing the ultimate result of the entries

in the production, distribution and use of income, and accumulation accounts.Balance sheets and accumulation accounts form a group of accounts that are concerned with

the value of assets owned by institutional units or sectors, and their liabilities at particular 

 points in time and with the evolution of those values over time. Balance sheets measure the

values of stocks and are compiled at the beginning and end of the accounting period. On the

other hand, the accumulation accounts record the changes in the values of assets and

liabilities during the accounting period. They are flow accounts, whose entries depend on the

amounts of economic or other activities that take place within a given period of time.

In the balance sheets three categories of assets are distinguished:

a) non-financial produced assets

 b) non-financial non-produced assets

c) financial assets

(i) Periodic stock verification

(ii) Continuous stock verification

(i) Periodic stock verification: It refers to a system where physical stock verification is

normally done periodically, i.e., once or twice in a year. Under this method, value of stock is

determined by physical counting of the stock on a particular date, usually at the end of the

year.

It is a simple and economical method of stock-taking and is adopted in small concerns. Thistype of verification is good only for the items which do not find place in the perpetual

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inventory records, e.g., works-in-progress, components and consumable stores at site etc. But

there are many limitations of this method. Stores may' be closed down for a few days to

facilitate stock-taking. There is possibility of fraud] discrepancy, etc.

(ii) Continuous stock verification: This system comprises of counting and verifying i number 

of items at random daily throughout the year so that all items of stores are verified severaltimes during the year. Notice of the particular stock to be verified each clay is given to the

store-keeper only on the date of actual verification.

As there is an element of surprise check in this system of stock-taking, effective control over 

the items of stores can be exercised. The system does not necessitate the closing down of the

stores to facilitate stock-taking. There is also less possibility of fraud and discrepancy, but the

method is expensive and is adopted by big concerns only.

The actual stock of material should not differ from the recorded stock under normal

circumstances. But-sometimes differences arise due to the following reasons:

(i) Breakage and wastage of materials due to improper handling.

(ii) Shrinkage and evaporation.

In earlier periods, non-continuous, or periodic inventory systems were more prevalent.

Starting in the 1970s digital computers made possible the ability to implement a perpetual

inventory system. This has been facilitated by bar coding and lately radio frequency

identification (RFID) labeling which allows computer systems to quickly read and process

inventory information as part of transaction processing.

Perpetual inventory systems can still be vulnerable to errors due to overstatements (phantom

inventory) or understatements (missing inventory) that can occur as a result of theft, breakage,

scanning errors or untracked inventory movements, leading to systematic errors in

replenishment.

The ESA95 recommends the Perpetual Inventory Method (PIM) for the calculation of the

stock of Fixed assets whenever direct information is missing (par. 6.04). The calculation of 

consumption of Fixed capital can be based on these stocks of assets. Besides net capital stock 

which appears in the Balance sheets can be derived within a PIM approach. In this paragraph

the basic principles of the PIM will be discussed. Using the PIM, gross capital stock iscalculated as the sum of gross fixed capital formation in Previous years, of which the service

live is not yet expired. In the simplest case it is assumed that the total investment of a

 particular asset does not deteriorate during the expected service life of that asset and is

discarded as a whole after that period of time.

Becoming a preferred employer involves more than learning the characteristics of such an

organization, however—it also requires that you understand what top performers want and

value in a relationship with an employer. Interestingly, the answers to both questions are the

same.

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To begin with, top-tier employers offer more than competitive pay and benefits. In fact, the

word "competitive" implies that you're simply matching what many other businesses are

providing. Even important additional elements, such as a good environment and open

communication, won't necessarily make the difference.

Studies show that the most important factor is how people feel about their role in the

business. Employees perform at different levels based on how they're engaged in the

lifeblood activities of the company. When an employer brings in people who are talented,

aligned with the company's values and focused on its goals, the results can be tremendous.

Want to set your company apart from your competitors? Here are some steps that can help

you draw the best people to your business: