ajspalia

 Profile Answers by ajspalia 

• Nov 27th, 2008

 

I am not sure in what context the user is asking but periodic and perpetual are two methods used for inventory control. Periodic inventory is undertaken more commonly  to calculate the value of actual inventory of goods for the purpose of closing financial period whereas perpetual inventory is mainly used as an inventroy control technique. For example we have 30 groups of materials lying in stock in a storage location. Every month end,as per our convinience, we take 2-3 groups and cary out thier physical inventory. Hence the main purpose of doing perpetual inventory is to keep a regular check on stock of inventory and make adjustments if a discrepency is found between physical and book stock.
As a matter of fact perpetual inventory may not cover hundred percent items in a fiscal year as more stress may be laid on 'A' and 'B' category items whereas a periodic inventory is supposed to cover all stock of materials in a profit centre.
A lot can be written about the topic but I feen this should be enough for now.

Anoopjeet

steadyshot23

 Profile Answers by steadyshot23 

• Mar 18th, 2010

 

A periodic inventory system adjusts inventory and records costs of goods  only at the end of each reporting period. Since you have to count your ending inventory by hand.  Perpetual inventory system continuously records both changes in inventory quantity  and inventory costs.