Question

What is the difference between a perpetual and periodic inventory system?

Answer 1

A perpetual inventory system updates inventory quantities continuously, while a periodic inventory system only updates inventory periodically. Perpetual inventory systems typically require more advanced software and constant monitoring, while periodic inventory systems may be simpler to administer but can lead to increased inventory discrepancies. Perpetual systems are better suited for businesses with high inventory turnover, while periodic systems may be better suited for businesses with lower turnover or less complex inventories.

Answer 2

The difference between a perpetual and periodic inventory system is the frequency at which inventory is counted. In a perpetual inventory system, inventory is continuously tracked and updated in real-time. In a periodic inventory system, inventory is counted and updated at regular intervals, such as once a month or once a year.

Answer 3

A perpetual inventory system is a method of tracking inventory in real-time, where every transaction is immediately recorded and updated. A periodic inventory system, on the other hand, involves physically counting and reconciling inventory at regular intervals to determine the quantity on hand.