What is the differences and similarities of pepectual inventory system and periodic inventory system?

Expert Solution



		Perpetual Inventory System	Periodic Inventory System
Differences	Defination	The Periodic system keeps continual track of the inventory to determine the closing inventory and cost of goods sold	The Periodic system relies upon an occasional physical count of the inventory to determine the closing inventory and cost of goods sold
	Accounts	Continual Updates to either General Ledger or Inventory Journal as Inventory related transaction occurs	There is no such entry, enteries occur when a physical inventory count occurs
	Computer System	Not possible manually	Simplicity allows manual records
	COGS	Continual updates on COGS	COGS is calculated in Lumpsum at the end of the reporting period
	Error Check	Easy Investigation of errors	Nearly impossible to track errors in between

Similarties		Both Systems are used for Inventory record maintainance and tracking

ekkarill92 answered 1 year ago

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