Beneath perpetual process:- the entity record for just about every single motion of your inventory (i.e. in and out of your inventory)
- at any single point of time, the business is capable of recall the inventory on hand
- frequency of stock-take expected is lesser than these accounted applying periodic process
Beneath periodic process,
- just about every single motion for the inventory (i.e. in and out) will not be expected to become tracked
- the entity execute a periodic stock-take to ascertain the inventory balance
- inventory on hand can only be recalled just after the stock-take is performed
- frequency of stock-take expected is larger than these accounted applying perpetual process
- cost of sales is calculated by utilizing the following formula: Opening Stock+ Cost of Goods Produced / Acquire - Closing stock
The above summarize the distinction involving perpetual inventory process and periodic inventory process.
See Also:
Cost-Plus Pricing Method
Strategic Costing
