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Periodic inventory systems

Subject: What is the difference between perpetual and periodic inventory system?
Details: 1//03 beginning inventory 50 units @ $30
2/22 purchase 70 @$33
3/7 sale(sold) (100)
4/15 purchase 90 @ 35
6/11 purchase 140@ 36
9/28 sale (100)
10/13 Purchase 50@ 38
12/4 sale (100)

Solution Preview

Beginning inventory plus net purchases for the period equals cost of goods available for sale. The main difference between a perpetual and a periodic system is that the periodic system allocates cost of goods available for sale to ending inventory and cost of goods sold only at the end of the period. The perpetual system accomplishes this allocation by decreasing inventory and increasing cost of goods sold each time goods are sold.
In the perpetual system, all purchases ...

Solution Summary

Differences between a perpetual and a periodic system are shown.

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