MANAGEMENT

Detailed explanation-1: -In a periodic inventory system, companies keep detailed inventory records of the goods on hand throughout the period. an additional adjusting journal entry for inventory may be needed in a merchandising company.

Detailed explanation-2: -In a periodic system, you enter transactions into the accounting journal. This journal shows your company’s debits and credits in a simple column form, organized by date. Record the purchase of inventory in a journal entry by debiting the purchase account and crediting accounts payable.

Detailed explanation-3: -Key Takeaways. Perpetual inventory systems track the sale of products in real time through the use of point-of-sale systems. The perpetual inventory method does not attempt to maintain counts of physical products.

Detailed explanation-4: -Perpetual inventory systems require more detailed inventory records. c. A periodic system requires cost of goods sold be determined after each sale.

Detailed explanation-5: -Under the periodic inventory system, the Physical inventory is taken to determine the cost of inventory on hand and the cost of merchandise sold. During inflationary periods, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet approximating the current replacement cost.