What system is used to keep a continuous record of stock on hand?

The correct choice is the perpetual inventory system, which is designed to provide a continuous record of stock on hand. This system updates inventory levels in real-time as transactions occur, which means that whenever inventory is bought, sold, or otherwise affected, the tracks reflect these changes immediately.

By utilizing a perpetual inventory system, businesses can maintain accurate records of their stock, which is essential for managing inventory levels effectively, minimizing stockouts, and ensuring that the inventory remains adequately balanced with customer demand. This real-time tracking allows businesses to make informed decisions regarding ordering and restocking procedures, ultimately optimizing inventory management processes.

The other options, such as periodic review and static inventory, do not provide the same level of ongoing oversight. A periodic review system updates inventory records at set intervals rather than continuously, which can leave businesses vulnerable to discrepancies and inaccuracies. Static inventory does not adapt to changes in stock levels, while an annual inventory typically involves a complete physical count of stock at the end of a year, which can be much less efficient for day-to-day operations.