Perpetual inventory system in coca cola

Assignment Report:
Of Accounting;
Perpetual Inventory system in
Coca Cola Beverages Pakistan Limited
Student ID:- AR524304
MBA ( HRM))
Submission Date:.22 /04/2013
SUBMITEDTO :Mr Kamran
Page | 1
SUBMİTTED BY :-
ASİF HUSSAİN

[COCA-COLA BEVERAGES PAKISTAN LTD ]
DEDICATION
I want to dedicate this effort of mine to all my teachers, friends and
colleaguess as well as my seniors who have helped me and guided me and I
also dedicate this effort to my family especially father who is a role model
and my guide in every part of my life. I am very thankfull to all of them.
ACKNOWLEDGEMENT
All the praises are for Almighty ALLAH. By the grace of whom, I have completed my
internship successfully.
I would like to acknowledge and extend my heartfelt gratitude to the following persons
who supported me throughout my great experience of the report and provided me moral
support and helped me whenever I needed.
• My course instructor, who helped me throughout my report and my semester.
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• Management of Coca-Cola Beverages Pakistan Limited, Sialkot for providing me
the great opportunity of report and all necessary information and material
regarding my report.
• Whom I come to contact during the course of my internship as well as preparation
of this report. I am fortunate to have many excellent seniors and colleagues who
provided much useful advice with their knowledge & experience.
At the end, I am very obliged to my family and friends who were always there by my side
to guide me and gave me courage that I can do the best in my life.
ABSTRACT
In business and accounting/accountancy, perpetual inventory or continuous inventory
describes systems of inventory where information on inventory quantity and availability
is updated on a continuous basis as a function of doing business. Generally this is
accomplished by connecting the inventory system with order entry and in retail the point
of sale system. In this case, book inventory would be exactly the same as, or almost the
same, as the real inventory.
A method of accounting for inventory that records the sale or purchase of inventory in
near real-time, through the use of computerized point-of-sale and enterprise asset
management systems. Perpetual inventory provides a highly detailed view of changes in
inventory and allows real-time reporting of the amount of inventory in stock; hence,
accurately reflecting the level of goods on the perpetual inventory system is intended as
an aid to material control. It is a system of stock control followed by stores department.
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The system follows a method of recording stores by which information about each
receipt, issue and current balance of stock is always available.
In this study I have tried to explain the term perpetual inventory system in accounting.
For my study of organization I have selected the Coca Cola Beverages Pakistan limited.
This is the prestigious organization in beverage industry and a part of a multinational
corporation named The Coca Cola International. I tried to explain the accounts system in
Coca Cola Company with reference to Perpetual Inventory System.
I am sure that this effort of mine will be a source of knowledge for all of us.
INTRODUCTION OF ORGANIZATION BUSINESS SECTOR
There are four key economic business sectors:
Primary sector: - Engaged in raw material extraction such as mining and farming.
Secondary sector: - Involves refining, construction and manufacturing.
Tertiary sector: - Deals with services such as law and medicine and distribution of
manufactured goods
Quaternary sector: - Relatively new type of knowledge industry focuses on
technological research, design and development such as computer programming and
biochemistry.
According to the above scenario, CCBPL falls in the secondary sector as the main
function of CCBPL is manufacturing soft drinks to refreshes its customers.
Beverage:-
“A liquid made up of particular ingredients to develop the taste and refreshment is known
as beverage.”
Beverage Industry in Pakistan:
Pakistan beverage industry has the international names offering the best quality
beverages across the country. It is an industry in which players continuously innovate, in
order to come up with better products as compared to the competitors to gain more
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consumers and satisfy the existing consumers. Now-a-days beverages become an
important part of the lives of people as it is a consumer consumable good. Usage of soft
drinks is become a trend now a days.
Introduction
Internationally:
Coca-Cola laid the foundation of the beverage industry when it was formed in May 1886
in Atlanta. However it was not until 1895 that the idea of selling coke in bottles was
introduced. With the passage of time Coca-Cola gained popularity and its product began
to get recognized internationally. Thus from its mere beginning in 1886 Coca-Cola has
now been transformed into a strong multinational with its product being currently
recognized all over the world. Coca-Cola, in fact, has now become one of the most
famous and widely consumed brands in the world. It has not only established its footings
in the beverage industry but is currently heading the list of the most financially sound
companies in the world
Pakistan:
The Coca-Cola Company is a global company with some of the world's most widely
recognized brands, the Coca-Cola business in Pakistan has completed its 50 years of
operation. The beverages are produced locally, employing Pakistani citizens. And their
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product range and marketing reflects Pakistani tastes and lifestyles, and they are deeply
involved in the life of the local communities in which they operate.
Mr. John Seward is the current of CCI at CCBPL plants in Pakistan. The Coca Cola
international was established in Atlanta in 1886. Currently Coca Cola international is
conducting its operations in more than 200 countries around the world. The numbers of
employees who are working with Coca Cola international are 92,400 worldwide. In
Pakistan CCBPL is conducting its operations from last 58 years. In Pakistan, CCBPL
started its business in 1953. CCBPL stands for Coca Cola Beverages Pakistan ltd.
VISION
“To become a market leader in ready to drink segment while adding best-in-class value to
all stakeholders”
MISSION
“Coca-Cola Pakistan exists to refresh the consumers, inspire moments of optimism
through our brands and actions as well as benefit all stakeholders, which we will do with
highest social responsibility and with uncompromising commitment towards quality of
our products and integrity in our operations”
VALUES
 We value and respect our people
 We communicate openly
 We have integrity
 We win as a team
 We drive quality and innovation
 We are accountable
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PRODUCTS
Coca Cola Beverages Pakistan has the following brands in different packs for the
convenience of its customers in Pakistan.
Brands:
Coca-Cola® Coke Diet® Fanta®
Sprite 3G® Sprite® Sprite Zero®
Two type of juices are also been introduced in Pakistan
Pulpy Orange®
Pulpy Tropical®
Coca Cola Beverages Pakistan has introduced mineral water as well
Kinley®
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Competitors:
There are many different competitors in the market but the PEPSI is the main competitor
of Coca Cola Beverages. Let’s have a look at the brands of PEPSI which are competing
the brands of Coca Cola in the market.
Pepsi® Miranda® Mountain Dew®
7UP® 7UP Zero® Teem®
Pepsi has introduced the following brand to compete the juices of Coca Cola Beverages.
Slice®
Pepsi has introduced mineral water as well to compete the kinley.
Aquafina®
Pepsi has introduced its energy drink in two flavors as well to attract the customers
Sting®
There are other many brand names of different companies which are as follows:
Gourmet, Shezan, Makah Cola, Murree Brewery, Tops etc.
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INTRODUCTION TO THE TOPIC
What is Perpetual Inventory System?
The perpetual inventory system is intended as an aid to material control. It is a system of
stock control followed by stores department. The system follows a method of recording
stores by which information about each receipt, issue and current balance of stock is
always available.
The Institute of Cost and Management Accountants of England and Wales, defines
perpetual inventory as "A system of records maintained by the controlling department,
which reflects the physical movement of stocks and their current balances."
According to Weldon, "Perpetual inventory system is a method of recordings stores
balances after every receipt and issue, to facilitate regular checking and obviate closing
down of work for stock-taking."
Thus, it is a system of ascertaining current balance after recording every receipt and issue
of materials through stock records. An important point which should be kept in mind is
that the perpetual inventory is usually checked by a programme of continuous stock-
taking. Perpetual inventory means the system of it cords whereas continuous stock-taking
means the physical checking of those records with actual stocks. '
Definition of 'Perpetual Inventory'
A method of accounting for inventory that records the sale or purchase of inventory in near real-
time, through the use of computerized point-of-sale and enterprise asset management systems.
Perpetual inventory provides a highly detailed view of changes in inventory and allows real-time
reporting of the amount of inventory in stock, hence, accurately reflecting the level of goods on
hand.
9

Investopedia explains 'Perpetual
Inventory'
A perpetual inventory system is superior to the older periodic inventory systems because it allows
for real-time tracking of sales as well as inventory levels for individual items, helping to prevent
stock outs. A perpetual inventory also does not need to be adjusted manually by the company's
accountants except to the extent it disagrees with the physical inventory count due to loss,
breakage or theft.
From Wikipedia, the free encyclopedia
In business and accounting/accountancy, perpetual inventory or continuous inventory
describes systems of inventory where information on inventory quantity and availability
is updated on a continuous basis as a function of doing business. Generally this is
accomplished by connecting the inventory system with order entry and in retail the point
of sale system. In this case, book inventory would be exactly the same as, or almost the
same, as the real inventory.
In earlier periods, non-continuous, or periodic inventory systems were more prevalent.
Starting in the 1970s digital computers made possible the ability to implement a perpetual
inventory system. This has been facilitated by bar coding and lately radio frequency
identification (RFID) labeling which allows computer systems to quickly read and
process inventory information as part of transaction processing.
Perpetual inventory systems can still be vulnerable to errors due to overstatements
(phantom inventory) or understatements (missing inventory) that can occur as a result of
theft, breakage, scanning errors or untracked inventory movements, leading to systematic
errors in replenishment.
The ESA95 recommends the Perpetual Inventory Method (PIM) for the calculation of the
stock of Fixed assets whenever direct information is missing (par. 6.04). The calculation
of consumption of Fixed capital can be based on these stocks of assets. Besides net
capital stock which appears in the Balance sheets can be derived within a PIM approach.
In this paragraph the basic principles of the PIM will be discussed. Using the PIM, gross
capital stock is calculated as the sum of gross fixed capital formation in Previous years,
of which the service live is not yet expired. In the simplest case it is assumed that the
total investment of a particular asset does not deteriorate during the expected service life
of that asset and is discarded as a whole after that period of time.
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Perpetual inventory system comprises of:
(a) Comparison of Bin Cards (quantitative perpetual inventory) and Stores Ledger
Accounts (quantitative-cum-valued perpetual inventory),
(b) Continuous Stock-Taking (Physical perpetual inventory)
(a) Comparison of Bind Cards and Stores Ledger Account
Bin card is maintained by the store-keeper and stores ledger account is maintained by
stores accountant. Each item of stores is recorded at these places simultaneously.
Normally the balances shown by the two records tally. However, th6re may arise some
differences between these two records due to the following reasons:
(i) Omission of an item of store in bin card or stores ledger account.
(ii) Wrong posting of an item of store either in bin card or in stores ledger account.
(iii) Arithmetical error in working out their balances. Therefore, the balances of the two
records should be reconciled at frequent intervals and correct balances should be drawn.
(b) Physical Stock Verification
The perpetual inventory system is not complete without a systematic procedure for
physical verification of stores. The correctness of balances as shown in the bin card or
stores ledger account should be verified by means of physical stock verification. Physical
stock verification may be conducted in the following two ways:
(i) Periodic stock verification
(ii) Continuous stock verification
(i) Periodic stock verification: It refers to a system where physical stock verification is
normally done periodically, i.e., once or twice in a year. Under this method, value of
stock is determined by physical counting of the stock on a particular date, usually at the
end of the year.
It is a simple and economical method of stock-taking and is adopted in small concerns.
This type of verification is good only for the items which do not find place in the
perpetual inventory records, e.g., works-in-progress, components and consumable stores
at site etc. But there are many limitations of this method. Stores may' be closed down for
a few days to facilitate stock-taking. There is possibility of fraud] discrepancy, etc.
(ii) Continuous stock verification: This system comprises of counting and verifying i
number of items at random daily throughout the year so that all items of stores are
verified several times during the year. Notice of the particular stock to be verified each
clay is given to the store-keeper only on the date of actual verification.
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As there is an element of surprise check in this system of stock-taking, effective control
over the items of stores can be exercised. The system does not necessitate the closing
down of the stores to facilitate stock-taking. There is also less possibility of fraud and
discrepancy, but the method is expensive and is adopted by big concerns only.
The actual stock of material should not differ from the recorded stock under normal
circumstances. But-sometimes differences arise due to the following reasons:
(i) Breakage and wastage of materials due to improper handling.
(ii) Shrinkage and evaporation.
(iii) Losses due to accident, fire, etc.
(iv) Losses arising out of breaking up bulk materials.
(v) Losses due to theft.
(vi) Misrouting in bin card or stores ledger account.
(vii) Over or short-issue.
The application of the Perpetual Inventory Method (PIM) requires estimates and
assumptions on three
parameters:
service life
2- discard pattern
3- depreciation method
Perpetual Inventory System Overview
Under the perpetual inventory system, an entity continually updates its inventory records
to account for additions to and subtractions from inventory for such activities as received
inventory items, goods sold from stock, and items picked from inventory for use in the
production process. Thus, a perpetual inventory system has the advantages of both
providing up-to-date inventory balance information and requiring a reduced level of
physical inventory counts. However, the calculated inventory levels derived by a
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perpetual inventory system may gradually diverge from actual inventory levels, due to
unrecorded transactions or theft, so you should periodically compare book balances to
actual on-hand quantities.
Perpetual inventory is by far the preferred method for tracking inventory, since it can
yield reasonably accurate results on an ongoing basis, if properly managed. The system
works best when coupled with a computer database of inventory quantities and bin
locations, which is updated in real time by the warehouse staff using wireless bar code
scanners, or by sales clerks using point of sale terminals. It is least effective when
changes are recorded on inventory cards, since there is a significant chance that entries
will not be made, or will be made incorrectly.
Balance sheets complete the sequence of accounts, showing the ultimate result of the
entries in the production, distribution and use of income, and accumulation accounts.
Balance sheets and accumulation accounts form a group of accounts that are concerned
with the value of assets owned by institutional units or sectors, and their liabilities at
particular points in time and with the evolution of those values over time. Balance sheets
measure the values of stocks and are compiled at the beginning and end of the accounting
period. On the other hand, the accumulation accounts record the changes in the values of
assets and liabilities during the accounting period. They are flow accounts, whose entries
depend on the amounts of economic or other activities that take place within a given
period of time.
In the balance sheets three categories of assets are distinguished:
a) non-financial produced assets
b) non-financial non-produced assets
c) financial assets
DIFFERENCES BETWEEN PERIODIC AND PERPETUAL
INVENTORY:
Periodic – During the period, the inventory account is not change; thus, it reflects the
beginning inventory amount. During the period, each purchase is recorded in the
Purchases account. As a consequence, the ending inventory eache period must be
measured by physical count, then ”costed” at unit price cost. b. Perpetual - During the
period, the Inventory account is increased for each purchase and decreased (at cost) for
each sale
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ADVANTAGES OF PERPETUAL INVENTORY OVER PERIODIC
INVENTORY :
It provides continuous inventory amounts It provides the cost of goods sold amount
without the necessity of taking a periodic inventory count. It provides continuing
information necessary to maintain minimum and maximum inventory levels by
appropriate timing of purchases. It provides continuing information about the quantity of
goods on hand at various locations. It provides a basis for measuring the amount of theft.
It provides cost of goods sold information needed to record sales at both selling price and
cost. It is readily adaptable to use of computers to process quickly large quantities of
inventory data.
Perpetual Inventory Journal Entries:
The following example contains several journal entries used to account for transactions in
a perpetual inventory system:
1. To record a purchase of $1,500 of widgets that are stored in inventory:
Debit Credit
Inventory 1,500
Accounts payable 1,500
2. To record $300 of inbound freight cost associated with the delivery of inventory:
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Debit Credit
Inventory 300
Accounts payable 300
3. To record a sale of widgets from inventory for $3,000, for which the associated
inventory cost is $1,800:
Debit Credit
Accounts receivable 3,000
Revenue 3,000
Cost of goods sold 1,800
Inventory 1,800
4. To record a downward inventory adjustment of $800, caused by inventory theft, and
detected during an inventory count:
Debit Credit
Inventory shrinkage expense 800
Inventory 800
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First-In, First-Out (FIFO) is one of the methods commonly used to calculate the value
of inventory on hand at the end of a period and the cost of goods sold during the period.
This method assumes that inventory purchased or manufactured first is sold first and
newer inventory remains unsold. Thus cost of older inventory is assigned to cost of goods
sold and that of newer inventory is assigned to ending inventory. The actual flow of
inventory may not exactly match the first-in, first-out pattern.
First-In, First-Out method can be applied in both the periodic inventory system and the
perpetual inventory system.
Example
Use the following information to calculate the value of inventory on hand on Mar 31 and
cost of goods sold during March in FIFO periodic inventory system and under FIFO
perpetual inventory system.
Mar 1 Beginning Inventory 60 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
14 Sale 190 units @ $19.00 per unit
27 Purchase 70 units @ $16.00 per unit
29 Sale 30 units @ $19.50 per unit
Solution
FIFO Periodic
Units Available for Sale = 60 + 140 + 70 = 270
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Units Sold = 190 + 30 = 220
Units in Ending Inventory = 270 − 220 = 50
Cost of Goods Sold Units Unit Cost Total
Sales From Mar 1 Inventory 60 $15.00 $900
Sales From Mar 5 Purchase 140 $15.50
$2,17
0
Sales From Mar 27 Purchase 20 $16.00 $320
220 $3390
Ending Inventory Units Unit Cost Total
Inventory From Mar 27 Purchase 50 $16.00 $800
FIFO Perpetual
Date Purchases Sales Balance
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Units Unit Cost Total Units Unit Cost Total Units Unit Cost Total
Mar 1 60 $15.00 $900
5 140 $15.50 $2,170 60 $15.00 $900
140 $15.50 $2,170
14 60 $15.00 $900 10 $15.50 $155
130 $15.50 $2,015
27 70 $16.00 $1,190 10 $15.50 $155
70 $16.00 $1,120
29 10 $15.50 $155 50 $16.00 $800
20 $16.00 $320
31 50 $16.00 $800
SWOT ANALYSIS
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The swot anlysis of the Perpetual Inventory System is as under:
STREGTHS:
Accurate Reporting
• Companies often experience more accurate financial reporting with a perpetual
inventory system. Accountants update the general ledger after each inventory
transaction. This results in a general ledger account that closely mirrors the actual
physical inventory on hand. Owners and managers can then make quality
decisions based on the accuracy of reporting inventory values. Multiple inventory
types also benefit from this method, as accountants accurately track each one
through the general ledger.
Electronic Management
• Perpetual inventory systems often use electronic methods to record transactions.
An example is the barcode system a clothing retailer uses when selling goods.
Each scan records data that updates the company's inventory value. Accountants
use this information to balance the general ledger. Companies also use the data to
order goods using a just-in-time system. Electronic ordering helps to prevent
stock outs and lost sales.
WEAKNESSES:
Cost
• Many perpetual inventory systems are expensive. The cost for these systems is
twofold. The technology necessary to make the system work can be a major
capital expense. Updating the system for new changes to the technology is also
costly. Training employees to properly use the system is yet another expense. On
the administrative side, companies must find accountants who can work the
system and manage frequent changes to the general ledger.
Process
• Perpetual inventory systems are often time-consuming. Electronic updates to a
company's general ledger may result in a need for account reconciliations.
Accountants will often spend copious hours each week or month to reconcile
inventory. Persistent errors can also cause further complications. Accountants
need to correct errors and balance the inventory account prior to closing the
19

company's books. Reporting inaccurate inventory figures can trigger an audit,
resulting in potential problems for the company.
• Additional record-keeping Increase workload, increase in staff. Additional costs
Staff costs, costs of computer package to maintain inventory records.
OPPORTUNITIES
Availability of correct stock data- Correct stock data is readily available for settlement of
insurance claims.
Investment in materials kept under control - The investment in materials is kept at a
minimum level as the actual stock is continuously compared with the maximum level and
minimum level.
Convenience and more demand from the business sector and from the organizations.
THREATS
(a) Loss of interest on capital locked up in stock.
(b) Loss through deterioration.
(c) Risk of obsolescence.
(xi) Employment of specialised staff - Since the work is spread throughout year, whole
time specialised staff can be engaged for the purpose.
(xii) Moral check on employees - The system acts as a moral check on the employees
working in the stores which increases their efficiency.
PRACTICAL STUDY OF THE ORGANIZATION
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Current Organizational Hierarchy Chart
Accounts system in CCBPL
The Coca Cola Beverages Pakistan has a centralized management structure in the
organization. The top most authority is the COCA COLA Corporate office at Lahore,
where all the heads of respective departments are posted. Accounts are being headed by
the Chief Financial Officer, who is the in charge off major financial and accounts matters.
At the territory units the officers in charge of the accounts and finance departments are
called FINANCE LEADER. At lower level officers are called inventory controllers.
Finance Department
Finance Department is responsible for proper flow of cash and for the controlling of
financial assets of the organization. The budget is allocated by TCCEC (The Coca-
Cola Export Corporation) for the period of month or two and finance manager of
TCCEC of and on came there to check the financial activities.
21

Inventory Accounting Policy
Inventories consist primarily of raw materials and packaging (which includes ingredients and supplies) and
finished goods (which include concentrates and syrups in Coca-Cola Company's concentrate operations,
and finished beverages in finished product operations). Inventories are valued at the lower of cost or
market. Coca-Cola Company determines cost on the basis of the average cost or first-in, first-out methods.
Source: Coca-Cola Co., Annual Report
22

Inventory Disclosure
Coca-Cola Co., Statement of Financial Position, Inventory
USD $ in millions
Source: Based on data from Coca-Cola Co. Annual Reports
Item Description The company
Raw materials and
packaging
Carrying amount as of the balance
sheet date of unprocessed items to be
consumed in the manufacturing or
production process. Also includes
purchased parts that will be used as
components of a finished product.
Coca-Cola Co.'s raw materials and
packaging increased from 2010 to
2011 and from 2011 to 2012.
Finished goods Carrying amount as of the balance
sheet date of merchandise or goods
held by the company that are readily
available for sale.
Coca-Cola Co.'s finished goods
increased from 2010 to 2011 but then
slightly declined from 2011 to 2012.
Inventories Carrying amount (lower of cost or
market) as of the balance sheet date of
inventories less all valuation and other
allowances. Excludes non current
inventory balances (expected to
remain on hand past one year or one
operating cycle, if longer).
Coca-Cola Co.'s inventories increased
from 2010 to 2011 and from 2011 to
2012.
Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
Raw materials and packaging 1,773 1,680 1,425 1,366 1,19
Finished goods 1,171 1,198 1,029 697 70
Other 320 214 196 291 29
Inventories 3,264 3,092 2,650 2,354 2,18
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Double-entry under the perpetual method
Bought
goods for
cash
Cash
payments
Cheque (butt) Stock control Dr
Cash at bank Cr
Bought
goods on
credit
Credit
purchases
Invoice (original) Stock control Dr
Creditors Cr
Sold goods
for cash
Cash
receipts
Receipt (copy) Cash at bank Dr
Sales Cr
Cost of sales Dr
Stock control Cr
Sold goods
on credit
Credit
sales
Invoice (copy) Debtor Dr
Sales Cr
Cost of sales Dr
Stock control Cr
The COCA COLA BEVERAGES PAKISTAN is currently operating and using the
FIFO (first in first out) method for its inventories in the accounts and finance
departments. However the actual information of the inventories can not be disclosed and
provided here as it is the company’s confidential matter.
First-in-first-out stock valuation
24

 Firms normally try to keep stock moving in Assumes that the first inventory
purchased is the first inventory sold.
 line with purchases dates to prevent old items from being shop-soiled, outdated.
FIFO - Example
Purchases Sales
Date Lot No Qty Unit
cost
Total Date Qty Unit
SP
Jan 1 1 50 6.0 300 Jan 4 40 12.0
6 2 50 6.2 310 9 30 12.5
13 3 50 6.5 325 18 20 12.5
24 4 50 6.6 330 31 50 12.9
Total 200 1,265 140
FIFO – Example (Cont’d)
Cost of sales Stock on hand
Quantity Unit cost Value Quantity Unit cost Value
50 6.0 300 10 6.5 65
50 6.2 310 50 6.6 330
40 6.5 260 60 395
140 870
25

Swot Analysis of Perpetual Inventory system in THE COCA
COLA COMPANY
We have discussed the inventory system in the COCA COLA COMPANY, let us discuss
the swot analysis of the topic very briefly:
Strengths (internal) Weaknesses (internal)
(1) Easy detection of errors.
(2) Better control over stores.
(3) Acts as internal check.
(4) Early detection of loss of stock.
(5) Accurate and up-to-date accounting
records.
(6) Availability of correct stock data.
(7) Easy to prepare interim accounts.
(8) Slow-moving and fast-moving lines of
inventory can be identified.
(1) Many perpetual inventory systems are
expensive.
(2) Companies must find accountants who can
work the system and manage frequent changes
to the general ledger.
(3) Perpetual inventory systems are often time-
consuming.
(4) costs of computer package to maintain
inventory records.
Opportunities (external) Threats (external)
1. New information technology tools can
provide quicker data sharing between CCBPL
various units.
2. More specializedpersonnels can be hired.
3. Data can be accessed from every where of
the world through the technology.
4. Frequent updating of records and data
entries can be established.
1. Risk of human error.
2. Persistent errors can also cause further
complications.
3. Reporting inaccurate inventory figures can
trigger an audit, resulting in potential problems
for the company
26

CONCLUSION
We have discussed our topic THE PERPETUALL INVENTROY SYSTEM in general
and with specific reference to the COCA COLA COMPANY. I tried to explain the
perpetual inventory system, its nature and uses in the accounts and finance system of
business and organization. Organizations like THE COCA COLA COMPANY have
large volumes of business and so they require a system of accounts that can be accurate
and prompt as well as easy to maintain and manage. However, it is the company’s
decision to adopt a suitable system for accounts and finance according to its
organizational structure.
27

RECOMMENDATIONS
We discussed the perpetual inventory system in the COCA COLA COMPANY; we also
discussed the strengths, weaknesses, opportunities and threats of the workforce
demographics. Here are some recommendations for the improvement:
1- A detailed and comprehensive data base must be established.
2- All information should be included in the data base.
3- Competent and qualified personnel should be hired for the accounts management.
4- New advanced technology should be utilized for the accounts management.
5- Untrained staff and inventory officers should be provided with trainings in new
approaches of inventory management and data processing.
6- The organization must provide training opportunities to its workers and officers to
minimize the factor of human error in data entry in inventories.
DATA COLLECTION SOURCES AND REFERENCE:
1- Web and internet
2- Wikipedia
3- Accounting Tools.(website)
4- Preserve Articles.(website)
28

5- The Coca Cola Company, official website
6- Staff and members of CCBPL, Sialkot & Gujranwala
29

Perpetual inventory system in coca cola

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