Carkod’s workplace

Perpetual and periodic inventory system

Posted on: September 1, 2008

Perpetual and periodic inventory system

Perpetual inventory system records every transaction. Inventory must be reordered once a year. Suitable for all kind of goods. Firm 1 buys from firm 2 Process:

Periodic inventory system records only cash transactions. Inventory must be reordered quarterly. Suitable only for invaluable goods. Process:

In periodic system there´s no cost of goods sold, inventory is only updated for financial statements.

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