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Homework answers / question archive / What is the difference between the periodic-inventory and perpetual-inventory methods? Give examples

What is the difference between the periodic-inventory and perpetual-inventory methods? Give examples

Business

What is the difference between the periodic-inventory and perpetual-inventory methods? Give examples.

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Perpetual inventory system is based on the book records which help in updating the records continuously. It provides the information about the inventory or cost of sales. It also helps in controlling the level of inventory. For example a grocery store.

Whereas, periodic inventory system is based on the physical verification of the inventory level which help in updating the information at the end of a particular financial period. It provides the information about inventory and the cost of goods sold. But there would no control on the level of inventory in this system. For example a small and retail businesses.

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