Cycle counting is best described as?

• A. A full yearly audit only.
• B. An on-demand process.
• C. A periodic inventory audit method to maintain accuracy by counting a subset of items.
• D. A monthly shipment count.

Answer: (C)

Cycle counting is a method used to keep inventory records accurate by regularly counting a subset of items. Rather than doing a full physical count of every item once a year, counts are scheduled and rotate through the stock. Each count compares the actual quantity on hand to what the system shows, and any discrepancies are investigated and adjustments posted to the records. This keeps inventory data reliable on an ongoing basis, helps catch errors early, and minimizes the disruption of a single, large annual count. It’s not a one-time or on-demand task, and it doesn’t focus on counting shipments. Instead, it’s a planned, periodic audit of selected items to maintain accuracy, which is exactly described by the option that defines a periodic inventory audit method to maintain accuracy by counting a subset of items.