Describe the perpetual and the periodic inventory systems

Describe the perpetual and the periodic inventory systems

Describe the perpetual and the periodic inventory systems. How are they different? Are there circumstances in which one system is better than the other? Include real-life examples. Your initial post should be -250 words.

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The perpetual and periodic inventory systems are used to monitor inventory or stock levels. The periodic system depends on regular physical count of the inventory to establish the cost of goods sold (CoGS) and the ending inventory balance. Additionally, the company uses purchases account to record merchandise purchases (Sundem, 2012). The CoGS and inventory account are updated regularly after a predetermined period for a month or year. The company determines its gross margin be subtracting the CoGS from its revenue. Under the periodic inventory system, CoGS is computed as follows…

APA 437 words