A) Explain in detail the differences between perpetual and periodic inventory methods. Also, explain which provides better control over a firm's inventory. Explain why you believe your choice provides better control.
B) Explain the importance of control programs and internal control techniques.
In the periodic system, purchases are recorded and inventory balances updated at the end of each accounting period. Under perpetual system, purchases, returns, sales, allowances, discounts, and inventory account balances are updated immediately. This ensures that accounts are always accurate at any point in time.
Perpetual inventory systems are used by companies that sell small numbers of high priced items. Such companies usually employ modern scanning and computer technology to facilitate real time recording of transaction. Perpetual system has higher complexities in consolidating all purchases, sales, and other market factors.
Perpetual inventory system ...
Difference in perpetual vs periodic inventory method; importance of control programs