Explain the perpetual inventory system


Response to the following problem:

Assume that you receive a Purchase Order (PO) from one of your company's regular customers. The customer orders dish washers that you normally manufacture and sell. The Bill of Materials (BOM) for the dish washers includes some parts that you produce and some parts that you purchase from your own suppliers. You may have to research the term Bill of Materials. List (do not describe) each and every step that will need to be followed in the process of filling the order. The list should include every possibility from the point of taking the order until the point where the payment is actually received.

Your company uses the perpetual inventory system and revenue is recognized when the goods leave your shipping dock.

Do not use any journal entries in your response.

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Cost Accounting: Explain the perpetual inventory system
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