rather than at the end of the period.

This unit cost is then

used to determine the cost of each sale, until another

purchase is made and a new average is computed. This

averaging technique is called a moving average. So the

inventory subsidiary ledger is shown in exhibit 5:

Exhibit 5 perpetual inventory account (Average cost)

Date

Purchases Cost of Merchandise sold Inventory

Quantity

Unit

cost

Total

cost

Quantity

Unit

cost

Total

cost

Quantity

Unit

cost

Total

cost

Jan. 1 10 20 200

4 7 20 140 3 20 60
10 8 21 168 11 20.7 228

22 4 20.7 82.5 7 20.7 144.9

28 2 20.7 41.4 5 20.7 103.5

30 10 22 220 15 21.56 323.5

8- Computerized Perpetual Inventory Systems:

A perpetual inventory system may be maintained

using manually kept records. However, such a system is

often too costly and too time costuming for enterprises with

a large number of inventory items and / or many purchase

Chapter Four: Inventories and the cost of goods sold

172

and sales transactions. In such cases, the record keeping is

often computerized.

An example of the use of computers is maintaining

perpetual inventory records for retail stores in described

below:

1. The relevant details for each inventory item, such as a

description, quantity, and unit size, are stored in an

inventory record. The individual inventory records make

up the computerized inventory ledger or master tile.

2. Each time an item is purchased or returned by a

customer, the inventory data are entered into the

computer and stored. Hourly, daily, or at some other

interval, the computerized inventory ledger (Master

File) is updated.
3. Each time an item is sold, a sales clerk passes an

electronic wand (optical scanner) over' the price tag

attached to the merchandise. The electronic wand reads

the magnetic code on the price tag. The inventory data

provided in the magnetic code are immediately entered