Comparison of Perpetual and Periodic Systems Source of Information Equation Periodic System Perpetual System Carried over from Carried over from Beginning Inventor prior period prior period Accumulated in the Accumulated in the Add: Purchases Purchases account Inventory account Equals: Cost of Goods Available for Sale Measured at end of Perpetual record Less:Ending Inventory period by physical updated at every sale inventory count Computed as a Measured at every Cost of Goods Sold residual amount at sale based on end of period perpetual record Task Team of FUNDAMEnTAL ACCOUNTING Business School. Sun Yat sen University 11
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Comparison of Periodic and Perpetual Systems Merchandise Purchases XX Inventory XX purchased from Accounts Payable XX Accounts Payable supplier on account XX Merchandise Accounts Payable XX Accounts Payable X returned to Purchases Returns & Allow. XXInventory supplier. XX Merchandise Accounts Receivable XX Accounts Receivable X sold to Sales XX Sales customer on account Cost of Goods Sold Invent Task Team of FUNDAMEnTAL ACCOUNTING Business School. Sun Yat sen University 2
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Comparison of Periodic and Perpetual Systems Transaction Periodic Perpetual Merchandise returned by customer Sales Returns and Allow XX Sales Returns and Allow XX Accounts Rece ivable XX Accounts Receivable XX Inventory XX Cost of Goods sold XX At end of accounting period Cost of Goods sold XX No entry Inventory(beginning) XX Purchases XX Inventory(ending) XX Cost of Goods sold Task Team of FUNDAMEnTAL ACCOUNTING Business School. Sun Yat sen University 13
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