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Unformatted text preview: COGS. The difference is the timing. Perpetual is “real-time”. ..in other words, at the time of sale. Periodic is done at the end of a period. In the periodic method, actual inventory is not known throughout most of the year, that is, until the period is over and stock counts are performed. How does each method affect the inventory and cost of sales calculations? The perpetual method employs the average, which is determined once an inventory item is sold. The COGS for each sale is then reached by multiplying the average by the items sold. The periodic method, COGS is a calculation and not a formal account as in the perpetual method. The periodic method does not maintain a running inventory balance during the period....
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This note was uploaded on 08/15/2010 for the course ACCT Acc281 taught by Professor Tontis during the Spring '10 term at DeVry Long Beach.
- Spring '10