What type of inventory counting occurs throughout the year by counting specific groups each month?

Cycle counting is a method of inventory auditing that involves counting specific subsets of inventory on a regular basis throughout the year rather than conducting a full inventory count at one time (as seen in periodic or annual counting). This ongoing process allows organizations to maintain more accurate inventory records, as discrepancies can be identified and addressed swiftly, enhancing overall inventory management.

In cycle counting, a company typically divides its inventory into groups or cycles, and each group is counted on a rotating schedule—often each month or at intervals that align with operational needs. This method provides the advantage of reducing the disruption caused by a full inventory count and allows for ongoing verification of stock levels and conditions, helping to improve accuracy and control.

Periodic counting, on the other hand, occurs at set intervals (e.g., monthly, quarterly) where all items are counted, making it less flexible than cycle counting. Annual counting refers specifically to an inventory count conducted once a year, typically at the end of the fiscal year. Stock counting is a more generic term and could refer to various types of inventory counts without the structured approach seen in cycle counting. Therefore, the choice that correctly defines the described process is cycle counting.