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This question is about list of skills.
periodic inventory vs. perpetual
The difference between periodic inventory and perceptual comes down to how often inventory is recorded in the system, whether in intervals or continuously. The periodic inventory system uses an occasional physical count to measure the level of inventory and the cost of goods sold. The perpetual system keeps track of inventory balances continuously, with updates made automatically whenever a product is received or sold.
Periodic inventory is a system of inventory management where the inventory is counted periodically. This means that the inventory is counted and recorded at predetermined intervals, such as monthly or quarterly. This type of inventory system only provides an approximation of the actual inventory on hand and does not provide real-time data on what is in stock.
Continuous inventory is a system of inventory management where the inventory is counted and recorded as each transaction occurs. This means that the inventory is counted and recorded as each purchase or sale is made. This type of system provides real-time data on what is in stock and can help prevent stockouts.
Key Takeaways:
| Periodic Inventory | Continuous Inventory |
|---|---|
| Definition; Inventory is counted and recorded at specific intervals, usually at the end of an accounting period | Definition; Inventory is counted and recorded on a continuous basis |
| Cost: Generally less costly as less frequent counts are required | Cost: Generally more costly as more frequent counts are required |
| Accuracy: Less accurate as the physical inventory is counted only periodically | Accuracy: More accurate as physical inventory is counted on an ongoing basis |
| Timing: Inventory is counted at the end of an accounting period | Timing: Inventory is counted on an ongoing basis |
| Frequency: Inventory is counted less frequently | Frequency: Inventory is counted more frequently |
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