What is the difference between a 100% inventory and a cyclic inventory?

• A. A cyclic inventory checks a subset of items periodically.
• B. A 100% inventory accounts for all items in the property book at a point in time.
• C. They are the same process with different names.
• D. 100% inventory is only done during audits.

Answer: (B)

The key idea is that one process is a full, single-snapshot check of everything, while the other is a rolling, partial check over time. A 100% inventory is a complete physical count of every item listed in the property book at a single moment. It creates a snapshot of on-hand quantities and reconciles those numbers with the records, establishing accountability for all items at that point in time. This full reconciliation isn’t limited to audits; it’s a standard method used to verify accuracy and update the property records.

In contrast, a cyclic inventory verifies only a subset of items on a rotating schedule. It’s designed to maintain ongoing control without counting everything at once, focusing on selected items (often high-value or high-risk ones) to catch discrepancies regularly and keep records current between full counts.

So, the difference is that the 100% inventory counts every item at a specific time to fully reconcile the property book, whereas a cyclic inventory checks a portion on a regular rotation to maintain control without a full-count disruption.