In the Perpetual Inventory Method, what does maintaining an active stock account allow a business to do?

Maintaining an active stock account in the Perpetual Inventory Method enables a business to provide exact stock levels at any time. This method continuously updates inventory records in real time with each purchase or sale, allowing businesses to have an accurate reflection of their stock on hand.

This precision is crucial for effective inventory management, as it helps prevent stockouts and overstock situations, facilitates better purchasing decisions, and supports efficient order management. With accurate stock levels readily available, a business can respond quickly to changes in demand and maintain optimal inventory levels, ultimately contributing to improved operational efficiency.

The other options do not accurately reflect the purpose of maintaining an active stock account. For instance, while identifying stock that needs to be cleared is important, it is not the primary function of an active stock account. Similarly, reducing the stock turnover rate and increasing the cost of goods sold do not relate to the real-time benefits of maintaining precise stock information.