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

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Question added by daoud ismail , CPA audit superintendent , EPCCO
Date Posted: 2015/05/25
Jyothish Thelappilly
by Jyothish Thelappilly , Strategy Consultant , Business Sweden

In Perpetual Inventory System, the merchandise inventory and cost of goods sold are updated continuously on each sale and purchase transaction

 

In periodic inventory, the merchandise inventory and cost of goods sold are not updated continuously. Instead purchases are recorded in Purchases account and each sale transaction is recorded via a single journal entry

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