What is the differences and similarities of pepectual invent

What is the differences and similarities of pepectual inventory system and periodic inventory system?

Solution

Perpetual Inventory System Periodic Inventory System Differences Defination The Periodic system keeps continual track of the inventory to determine the closing inventory and cost of goods sold The Periodic system relies upon an occasional physical count of the inventory to determine the closing inventory and cost of goods sold Accounts Continual Updates to either General Ledger or Inventory Journal as Inventory related transaction occurs There is no such entry, enteries occur when a physical inventory count occurs Computer System Not possible manually Simplicity allows manual records COGS Continual updates on COGS COGS is calculated in Lumpsum at the end of the reporting period Error Check Easy Investigation of errors Nearly impossible to track errors in between Similarties Both Systems are used for Inventory record maintainance and tracking