Jason is wrong to present estimates as actual counts. In a situation in which there is understaffing, inexperience, etc. it is even more likely that errors have been made. If Jason is convinced that there are inadequate resources to perform a count, it is his duty to call that to management’s attention for possible remediation.
It is unlikely that Jason’s estimates will exactly match the actual counts. At least some of the effect will be realized in a future period when the inventory is correctly trued up to actual, violating the ‘matching principal’. If Jason underestimated the dollar value of inventory, the result is that it would be undervalued on the balance sheet and that shrinkage (expense) was realized unnecessarily.
Errors can be made in perpetual systems. Items can be received or shipped under incorrect inventory numbers, for instance so it is important to update the system after a count. In this way a company avoids embarrassing situations in which orders were accepted when in realty there is not enough to ship. Management uses the changes made in the perpetual system to determine if controls are adequate, if purchasing is efficient, if certain stock is not moving, …
