A department store uses a perpetual inventory system. At year-end, it shows a balance in the merchandise inventory account of $2 million. Assuming that the inventory records have been maintained properly, a year-end physical inventory .

will probably indicate less than $2 million in merchandise on hand.

Explanation:

Perpetual inventory system is when information regarding quantity and availability in inventory of a business is continuously updated. Sale or purchase big inventory is recorded immediately with the use of computerised point of sale systems.

The department store uses a perpetual inventory system. At year-end, it shows a balance in the merchandise inventory account of $2 million. The physical inventory will probably be less than $2 million because it adjust its records to make the recorded inventory amount agree with the actual inventory on hand at end of year.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.