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Inventory Account and Cost of Goods Sold Account are used in both systems but they are updated continuously during the period in perpetual inventory system whereas in periodic inventory system they are updated only at the end of the period.
Purchases Account and Purchase Returns and Allowances Account are only used in periodic inventory system and are updated continuously. In perpetual inventory system purchases are directly debited to inventory account and purchase returns are directly credited to inventory account.
Sale Transaction is recorded via two journal entries in perpetual system. One of them records the sale value of inventory whereas the other records cost of goods sold. In periodic inventory system, only one entry is made.
Closing Entries are only required in periodic inventory system to update inventory and cost of goods sold. Perpetual inventory system does not require closing entries for inventory account.
The merchant acquires goods for resale to customers. Acquiring of this merchandise can be recorded in books in two different ways depending on the whether a perpetual system or a periodic system is in use at the company. While a periodic system is simple to implement it is not as robust as the perpetual system.
The accounting entries slightly differ in both these methods.
Periodic Inventory System
When a purchase takes place in this system, the merchant makes an entry in the books of accounts by debiting 'purchases' and crediting 'accounts payable' or 'cash'. The purchase account is a unique account and is neither an asset nor an expense. the purchases accounts closing balance at the end of an accounting period represents the total inventory purchased during the year and this amount ultimately has to be aportioned between 'cost of goods sold' in the income statement and 'stock of inventory' in the balance sheet. the aportionment is based on how much of the purchased goods are resold versus how much remains in ending inventory.
Perpetual Inventory System
This system is more robust and 'real time' in nature than the periodic inventory system. In this system the purchases account is not needed. The inventory account and the cost of goods sold account are constantly updated as transactions take place. Freight-in is added to the inventory account. discounts and returns reduce the inventory account. in this system when a purchased is made, it is recorded by debiting inventory account and crediting the accounts payable account. when a sale is made two entries are made (1) debiting accounts receivable and crediting sales account (with actual sale amount) and (2) debiting cost of goods sold and crediting inventory account (with the cost of goods sold for corresponding sale).
Perpetual Inventory Systemويعني (( نظام الجرد المستمر ))Periodic Inventory Systemويعني (( نظام الجرد الدوري ))ايه الفرق بين النظامين؟؟1- نظام الجرد المستمر هو ان الشركة بتعمل حساب ضمن حساباتالشركة هو حـ/ المخزن ،، هذا الحساب يدخل فيه حركة المخزنكلها.يعني عند شراء المنتجات ودخولها المخزنبنقولمن حـ/ المخزن_______ إلى حـ/ (( الحدثالمكمل ليه )) وليكن الخزينةوعند صرف البضاعة وبيعهاوخروجها من المخزن بنقولمن حـ/ (( الحدث المكمل ليه )) وليكنالعملاء_______ إلى حـ/ المخزنيعني بنفضل نقيد كل حركة بتحدث على البضاعة (( المخزن )) يوم بيوم .2- أما نظام الجرد الدوري هو أن الشركة تعمل حساب مستقل لكلحدث على المخزن .يعني عند شراء المنتجات ودخولها الشركةبنقولمن حـ/ المشترياتعند البيعنقولإلى حـ/ المبيعاتعند رد المبيعاتنقولمن حـ/ مردوداتالمبيعاتعند رد المشترياتنقولإلى حـ/ مردوداتالمشترياتوفي نهاية السنة بنعمل جرد للمخزون وبيكون هو ده مخزون آخرالمدة .3- المهم النظام الأول وهو نظام الجرد المستمر بيستخدمغالبا في الشركات الصناعية وعند الصرف من المخزن بنصرف خامات بتدخل في العمليةالانتاجية فبيكون القيد كما يليمن ح/ التشغيل_______ إلى حـ/ المخزن ( خامات )يعني بنقفل حساب المخزن في حسابالتشغيلأما نظام الجرد الدوري فغالبا بيستخدم في الشركات والمؤسساتالتجارية
In perpetual inventory system, merchandise inventory and cost of goods sold are updated continuously on each sale and purchase transaction. Some other transactions may also require an update to inventory account for example, sale/purchase return, purchase discounts etc. Purchases are directly debited to inventory account whereas for each sale two journal entries are made: one to record sale value of inventory and other to record cost of goods sold. Purchases account is not used in perpetual inventory system.
In periodic inventory system, 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. Thus cost of goods sold account does not exist during the accounting period. It is determined at the end of accounting period via a closing entry.
Prepetual Inventory System
Inventor information on inventory quantity and availability is updated on a continuous basis as a function of doing business. Generally this is accomplished by connecting the inventory system with order entry and in retail the point of sale system.
Periodic Inventory System
inventory system in which updates are made on a periodic basis
