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What are two principal types of inventory systems?

There are two principal types of inventory systems, the perpetual system and the

periodic system. The perpetual inventory system records are kept perpetually

up-to-date on inventory and the cost of goods sold (Meigs & Williams & Haka &

Bettner 1999: 199). On the contrary, the periodic inventory system takes no

effort on keep up-to-date records of either the inventory or the cost of goods

sold. Instead, inventory amounts are determined only periodically usually at

the end of each year (Meigs & Williams & Haka & Bettner 1999: 202).



The different between these two systems are how they record on the accounting

ledger. The perpetual inventory system records the cost of inventory purchased as an

asset, and records t...

Posted by: Joel Chibota

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