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discuss the major differences between a perpetual inventory system and a periodic inventory system

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Tod Thiel
Tod ThielLv2
28 Sep 2019
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Present a detailed explanation of the recording of purchasesunder a perpetual inventory system. Use hypothethical figures toillustrate the perpetual inventory system. After presenting yourhypothetical figures, discuss how a perpetual inventory system isdifferent from periodic inventory system. Your answer shouldillustrate understanding of the perpetual inventory system.

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

Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month.

Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.

Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.

All of the answers are correct.

8. Which of the following statements is false? A. A perpetual inventory system can detect inventory shrinkage. B. A perpetual inventory system updates the inventory account for each purchase and sale. C. A perpetual inventory system uses a purchases account. D. A periodic inventory system uses the physical count of inventory to infer cost of goods sold.

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