Which statement describes cycle counting?

• A. It is a one-time year-end verification.
• B. It is the process of physically counting the entire inventory once per quarter.
• C. It is ongoing, selective counting of inventory items to maintain accuracy.
• D. It uses only automated sensors without human checks.

Answer: (C)

Cycle counting is an ongoing, selective process that verifies a subset of inventory items to keep the inventory records accurate. Instead of a single year-end verification or counting everything at once, cycle counting continuously reviews different items on a schedule (often focused on items with higher value or turnover) and adjusts the records when discrepancies are found. This approach helps catch errors sooner, reduces the disruption of full physical counts, and keeps the perpetual inventory system trustworthy.

Compared with the other options, a one-time year-end check isn’t cycle counting because the process is ongoing, not a single event. Counting the entire inventory every quarter is a full physical count, not selective cycle counting. Relying only on automated sensors without human checks ignores the need to verify counts and investigate discrepancies, which cycle counting typically requires.