Make a comparison between periodic and perpetual inventory systems and explain under which conditions each system should be used, you can support your answer by examples

Q: What are the important factors in using a perpetual inventory system?

A: There are two types of inventory systems: Perpetual and Periodic.

Q: Differentiate between periodic and perpetual inventory system with the help of an example.

A: The monetary amount associated with the goods in inventory at the end of an accounting period is…

Q: In the Perpetual/Periodic Inventory System what are the merchandise inventory and Income summary?…

A: Perpetual inventory: Under perpetual inventory system each transaction for purchase of inventory,…

Q: Explain the difference between the Perpetual and Periodic inventory systems and let us know why…

A: Inventory is the product that a company owns for resale in its regular course of business. It is…

Q: Describe the alternative approaches for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies are…

Q: Explain the steps necessary to calculate and record LIFO Reserve, and consequential Write-Down under…

A: LIFO reserve refers to the inventory method which is defined as the difference among what the ending…

Q: Which of the following costs do not come under inventory carrying cost calculation? Investment in a…

A: The ideal order quantity for a corporation to purchase in order to minimize inventory costs is known…

Q: Is an adjusting entry needed for inventory shrinkage when using the periodic inventory system?…

A: Definition:

Q: whats the inventory tracking for this?

A: Goods which are held for the resale by the business and the business deals with such type of…

Q: What is the main distinction between perpetual and periodic inventory systems? Which type of system…

A: Explain the main distinction between perpetual inventory system and periodic inventory system and to…

Q: Describe the integration of the Inventory Ledger with the Payables, Receivables and General Ledgers.…

A:

Q: When using the periodic inventory system, which inventory costing method(s) always produces the same…

A: Under the periodic inventory system. the inventory is counted usually at the end of the period and…

Q: Explain how a periodic inventory system operates.

A: Inventory: It can be defined as all the goods, items, materials, and merchandise that are held by a…

Q: What are the main differences between periodic inventory system and perpetual inventory system?…

A:

Q: Describe a  Comparison of the Perpetual and Periodic Inventory Systems

A:

Q: What conditions must exist for the retail inventorymethod to provide valid results?

A: Retail inventory method: This method is like a gross profit method. It depends on the relationship…

Q: Why is it important to periodically take a physical inventory when using a perpetual inventory…

A:

Q: In your own words, discuss the differences between a perpetual and periodic inventory system. Your…

A: Inventory is the current asset posted on the balance sheet of the company.

Q: Explain the types of inventory and the differences between a perpetual inventory system and a…

A:

Q: Use the information in the account records on the Inventory tab to calculate the total cost of…

A: FIFO means First In, First Out. That means the cost of ending inventory comprises of cost of…

Q: Describe the typical approach for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies need to…

Q: What are the main differences between periodic inventory system and perpetual inventory system?

A: Periodic inventory system and Perpetual inventory systems are two systems used for the inventory…

Q: Explain the inventory accounting system.

A: Inventory accounting is the body of accounting that used to valuing and accounting for changes in…

Q: How about perpetual inventory system

A: The difference between the recording of the inventory under periodic and perpetual inventory system…

Q: Please record the entries for the inventory purchase transactions below (Perpetual Inventory System)

A: A Perpetual Inventory system is a method is used for recording inventory balance after each receipt…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Definition: Perpetual inventory: Under the perpetual inventory system, each transaction for the…

Q: Describe the calculation of the cost of goods sold when using the periodic inventory system.

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Explain the differences between a Perpetual Inventory system and a Periodic Inventory System.…

A: Periodic Inventory System:-  Its an Inventory Valuation Method where inventory account is updated at…

Q: Explain an example of periodic inventory system.

A: In periodic system the transactions of sales and purchase of inventory is recorded at a certain…

Q: What is the inventory system called that continuously discloses the amount of inventory? Group of…

A: Solution: Under perpetual inventory system, inventory records are updated with each receipt and…

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

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: What is the difference between perpetual and periodic inventory system

A: Introduction:- The most important variation between the periodic and perpetual inventory systems is…

Q: Briefly contrast the accounting procedures in perpetual andperiodic inventory systems.

A: Following are the differences between accounting procedures in perpetual and periodic inventory…

Q: nventory valuation is used to calculate the cost of goods sold and cost of ending inventory. The…

A: First in First out Method This is one of the popular method of inventory valuation.  While using…

Q: Discuss how discounts are recorded in a perpetual inventory system, and compare how discounts are…

A: There are two methods to determine the inventory of the company purchased. 1. Perpetual inventory…

Q: Prepare journal entries to record the transactions, assuming perpetual inventory system.

A: Journal Entries: are the first recording of any transaction in the books of accounts. These entries…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.