What is a cycle count?

• A. A regular, periodic verification of a subset of inventory to ensure accuracy without performing a full physical inventory.
• B. A full annual audit of all property.
• C. A one-time count at unit formation.
• D. An electronic scan of financial records.

Answer: (A)

Cycle count is a regular, ongoing verification of a subset of inventory on a rotating schedule to keep inventory records accurate without pulling all items for a full physical inventory at once. In practice, you select a portion of materials—often prioritizing high-value or high-turn items—count what’s on hand, and compare it to what the records show. Any discrepancies are investigated and corrected, and the inventory system is updated accordingly. This approach reduces downtime, keeps data current, and helps uncover issues like misplacements, data entry errors, or losses more quickly than waiting for a full stocktake. It’s not a once-a-year audit of everything, nor just a one-time count, and it isn’t an electronic scan of financial records.