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A key difference between the periodic and perpetual inventory systems is the timing of the calculation of cost of goods sold.
Periodic Inventory System
An inventory accounting system where updates to inventory levels are made on a periodic basis rather than continuously.
Perpetual Inventory System
An accounting method that records inventory purchases and sales in real-time, providing a continuous account of inventory balances.
Cost Of Goods Sold
The direct costs attributed to the production of the goods sold by a company, including materials and labor.
- Understand the difference between periodic and perpetual inventory systems including the calculation and timing of cost of goods sold.
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Learning Objectives
- Understand the difference between periodic and perpetual inventory systems including the calculation and timing of cost of goods sold.
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