subtracting ending inventory. Ending inventory is determined by a physical count atthe end of the year under a periodic inventory system. Even in a perpetual inventory system, a physical inventory count at year-end is normally taken due to the potential for loss, error, or shrinkage of inventory during the year.5.Inventory planning and control is of vital importance to the success of a merchandising or manufacturing concern. If an excessive amount of inventory is accumulated, there is the danger of loss owing to obsolescence. If the supply of inventory is inadequate, the potential for lost sales exists. This dilemma makes inventory an asset to which management must devote a great deal of attention.
6.Reconciliation between the recorded inventory amount and the actual amount of