Chapter 6--Inventory.pptVIP

Chapter 6 INVENTORIES Inventory Systems Perpetual System It maintains a continuous record for inventory on hand. It is often used by a business that sells products of high unit value. Periodic System Under periodic system inventory records are not changed when purchases and sales occur. The amount of ending inventory is determined by a physical count of the goods remaining on hand at the end of an accounting period. It is often used by a business that sells a large number of goods with low unit price. Merchandise Inventory is updated according to the balance. Periodic System 1. Spec