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    Main distinctions of perpetual and periodic inventory systems

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    Question:

    What is the main distinction between perpetual and periodic inventory systems? Which type of system provides better internal control over inventory? Explain why. Describe in words the journal entries that are made in a perpetual inventory system when inventory is sold on credit.

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    Solution Preview

    The main difference between the perpetual and periodic inventory systems is the way ending inventory is arrived at. In a perpetual system, ending inventory is calculated after each sale or purchase. In a ...

    Solution Summary

    This solution of 134 words explains the main difference between perpetual and periodic inventory systems by explaining the characteristics of both.

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