What does the perpetual inventory system do automatically when items are sold?

What does the perpetual inventory system do automatically when items are sold?

• A. Generates new stock automatically
• B. Sends inventory data to the manufacturer
• C. Reorders automatically based on sales data
• D. Deducts items from inventory in the computer

Answer: (D)

Perpetual inventory tracks stock in real time, updating the computer records with each sale. When items are sold, the system automatically reduces the on-hand quantity in the inventory database and often updates the cost of goods sold as well. This automatic deduction keeps stock levels accurate and current. It doesn’t by itself generate new stock or automatically reorder or notify suppliers—that requires separate replenishment or purchasing processes.

Perpetual inventory tracks stock in real time, updating the computer records with each sale. When items are sold, the system automatically reduces the on-hand quantity in the inventory database and often updates the cost of goods sold as well. This automatic deduction keeps stock levels accurate and current. It doesn’t by itself generate new stock or automatically reorder or notify suppliers—that requires separate replenishment or purchasing processes.