Glossary
Annual Inventory Count
An Annual Inventory Count is a process where a business physically counts and verifies all the items in its inventory once a year. This count is typically done at the end of the fiscal year to ensure that the recorded inventory numbers in the company’s financial statements match the actual physical inventory. The process helps identify discrepancies due to loss, theft, or errors in inventory records, allowing the business to adjust its inventory and financial records accordingly. It’s an essential part of inventory management, helping businesses maintain accurate stock levels and financial data.
Related Glossary Terms
Active Stock
Active stock means the inventory that a business uses, refills, and moves around regularly. This stock includes items with a constant turnover rate, are consistently in demand, and require frequent restocking. Active stock differs from passive or inactive stock, including items that move slowly or are rarely used.
ABC System
A cost management system that tracks financial and operational data on resources, activities, drivers, and measures. ABC models are created and maintained within this system.
ABC Model
In cost management, a representation that illustrates the cost of resources used over a period and how these are consumed by activities and subsequently traced to products, services, or customers.