Perpetual vs periodical

Perpetual vs periodical - Perpetual vs. Periodic Inventory...

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Perpetual vs. Periodic Inventory System    Overview of Inventories Perpetual Inventory System     Perpetual inventory system updates inventory accounts after each purchase or sale.       Inventory subsidiary ledger is updated after each transaction.       Inventory quantities are updated continuously.    Periodic Inventory System     Periodic inventory system records inventory purchase or sale in " Purchases"  account.       "Purchases" account is updated continuously, however, "Inventory" account is updated on a periodic basis, at the end of each accounting  period (e.g., monthly, quarterly)       Inventory subsidiary ledger is not updated after each purchase or sale of inventory.       Inventory quantities are not updated continuously.       Inventory quantities are updated on a periodic basis.    Example 1 (Company A)     On May 1, 2006: Purchased 1,000 units of merchandise at $30 per unit. Under  Perpetual  inventory system  5/1/2006  Debit Credit Merchandise Inventory  30,000 Accounts payable  30,000 Under  Periodic  inventory system  5/1/2006  Debit Credit
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Purchases 30,000 Accounts payable 
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Perpetual vs periodical - Perpetual vs. Periodic Inventory...

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