Final answer:
A merchandising company that uses a perpetual inventory system updates its inventory records at the end of each accounting period to reflect the most accurate information.
Step-by-step explanation:
In a merchandising company that uses a perpetual inventory system, at the end of each accounting period, the company updates its inventory records to reflect the most accurate information. This involves taking a physical count of the merchandise on hand and comparing it to the inventory records. Any discrepancies are then adjusted by making journal entries to the inventory account. This process helps ensure that the inventory balance is accurate and reflects the actual amount of merchandise the company has at the end of the accounting period.