Accounting › Section E · Merchandising transactions › Topic E.2
Perpetual versus periodic inventory systems
Every merchandiser must know what its goods cost and how many it has left. It can keep a running record that changes with every purchase and sale, or it can count the stock at the end of the period and work backwards. The choice changes the accounts, the journal entries and what managers can see.
In this topic
- Two ways to keep track of goods
- The perpetual system
- The periodic system
- The periodic cost of goods sold
- Worked example: periodic COGS at Fernway
- Worked example: one sale recorded both ways
- Counting stock under a perpetual system
- Choosing a system
- Common mistakes to avoid
- Key takeaways
This topic is part of Wuanberri Pro. Checking your access…