ECONOMICS

Detailed explanation-1: -Periodic inventory is an accounting stock valuation practice that’s performed at specified intervals. Businesses physically count their products at the end of the period and use the information to balance their general ledger.

Detailed explanation-2: -Periodic system (486): Physical count of items in inventory made at periodic intervals. Perpetual inventory system (486): System that keeps track of removals from inventory continuously, thus monitoring current levels of each item.

Detailed explanation-3: -As an accounting method, periodic inventory takes inventory at the beginning of a period, adds new inventory purchases during the period, and deducts ending inventory to derive the cost of goods sold (COGS). It is both easier to implement and cost-effective by companies that use it, which are usually small businesses.

Detailed explanation-4: -The periodic inventory system is often used by smaller businesses that have easy-to-manage inventory and may not have a lot of money or the opportunity to implement computerized systems into their workflow. As such, they use occasional physical counts to measure their inventory and the cost of goods sold (COGS).