in a perpetual inventory system, inventory is initially recorded at cost.
A perpetual inventory system can be described as the techniques that is been used by the company so that they can continuously estimates the inventory that is been formed in the company which is usually based on the electronic records.
It should be noted that when using this system that is been described above, the the inventory is usually been recorded at the cost so as to allow the further calculation that can be used in analyzing the inventory in the future.
Therefore, first option is correct.
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