Question

what is the periodic inventory system and what is the perpetuall inventory system? why might the organization choose one over the other

Answer 1

Periodic inventory System.?
As th ename suggest, under periodic inventory system we can not track records on daily basis, inventory is tracked by physical inventory count.
Under periodic inventory system COGS is calculated as Opening Inventry + Purchase - closing inventory.

Perpetual Inventory System ?
Under perpetual inventory system inventory balance is to be updated after every transaction.It eliminates the need for the store to close down for a physical inventory stock-taking as perpetual inventory systems allow for continuous stock-taking.

For Small organization it is preferred to use periodic inventory system, if they have cost issues,
periodic inventory management may be a better choice for small organization because you can get by with just a cash register and a simple accounting procedure, while for large organization it will prefferd to use perpetual inventory system as now software do all the inventory management, it will get clear picture of sales purchase stock.