Title: Differentiate between periodic and perpetual inventory systems in a merchandising business.
Course: Accounting (12104-I) > Section: Understanding the Accounting Cycle for a Merchandising Business

Differentiation should include

- defining a periodic inventory system as one that requires a physical inventory count to be taken before financial statements are prepared
- defining a perpetual inventory system as one that maintains current inventory levels throughout the accounting period
- explaining how the cost of goods sold is determined for each system.