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kennethsequeira/Periodic Inventory vs Perpetual Inventory.csv

Created January 22, 2020 17:00
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Periodic Inventory vs Perpetual Inventory
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Periodic Inventory vs Perpetual Inventory.csv
Periodic Inventory Perpetual Inventory
The accounting for stock/inventory is not updated frequently. Stocktake is done at the end of a period (usually, year-end) when you will update the relevant stock account The stock/inventory and its accounts are updated in tandem.
You can book the expense of an item right away when booking the purchase invoice. When booking a Purchase Invoice, the expense is not booked for the items directly. It is booked after the sale of the item is made under Cost of Goods Sold (COGS).
COGS needs to be calculated for Periodic Inventory. COGS readily available in case of Perpetual Inventory as the booking is done on every sale.
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