Which statement correctly describes cyclic inventories compared to annual inventories?

• A. Cyclic inventories count all items at a set time.
• B. Cyclic inventories count a subset of items periodically to maintain accuracy, while annual inventories count all items at a set time.
• C. Cyclic inventories count all items at a set time, while annual inventories count a subset of items periodically.
• D. Cyclic inventories are used only for financial audits.

Answer: (B)