Periodic vs Perpetual Inventory Accounting
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- เผยแพร่เมื่อ 4 มิ.ย. 2015
- This video discusses the differences between the periodic and perpetual inventory methods. A comprehensive example is provided to illustrate the different journal entries that are used to record inventory purchases, sales, and period-end adjustments under each method.
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![Perpetual Inventory Accounting [WITH FULL EXAMPLE]](/img/n.gif)
I can't tell you how relieved I am when searching a topic, and I see you have an offering on the subject. Always informative, and more importantly, understandable. Thanks so much!
Thank you for the kind words my friend! I always enjoy seeing your thumbnail photo :)
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Very clear and understandable.
This video is very useful because we can learn how to do inventory and what is it about.
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Life saver
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Thank you so much this wassuch a huge help
hello thank you for sharing this awesome video. but i have a question here, in your example inventory value is $4000 and COGS value is 3750, because the sell is smaller (only 750 units) than the purchase (800 units), how if the sell is bigger (lets say 820 units), then the COGS value must be $4100 in perpetual method, which is bigger than inventory. if that happen, how do i get the COGS value with periodic method, and how do i make it balance with the purchase value?
thank you
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Clear dude!
thanks so much ,, very helpful ... One question ,, what if the purchases we made are at different rate than starting inventory ?
This is a good question. It would depend on the inventory method that you are using (FIFO, LIFO, Average Cost). Here are some videos that I have on these inventory methods:
LIFO: th-cam.com/video/zLAvpS6o25E/w-d-xo.html
FIFO: th-cam.com/video/Wa83L8TvoaM/w-d-xo.html
Average Cost: th-cam.com/video/qAWVVw-dC5A/w-d-xo.html
Thanks for watching!
Appreciate🙏
You are a godsend!
Happy to help!
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Happy to help!
Thankyouuu!
No problem!
How do you account for losses that aren't recorded such as theft or breakage? If your periodic count at the end for example is a lesser amount than how the math should work out... how does this work?
goated content
Btw how the income statement calculation? Is same both method??
i have an issue where i play clash royale all class so this helps a lot
Perpetual seems to make so much more sense and seems much more straightforward and organized. Why would a company even want to use periodic?
Please help me please answer
1.purchase 2.purchase returns & allowance 3.Purchase discount 4.Freight in Is there anything else which goes to Merchandise Inventory account???
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Unfortunately not, but it's funny you should mention that. People have said I sound like Foodwishes and also the actor John C Reilly :)
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Thank you!
Tnk u that is all i can say
No problem!
In periodic method, you only debit $250 in inventory, whereas there's suppose to be $500 in the ending inventory. But in perpetual inventory you have an ending inventory of $500. How would we justify the balance $250 in the periodic method in inventory?
In both methods, your ending inventory is $500. For periodic, the beginning inventory was $250. In the very last journal entry, we add $250 to inventory. Thus, if you were to do a T-account the total inventory would be $500 at the end of the month. This video was intended to compare the 2 methods. I have more detailed videos below for each method in case you need it. Best of luck in your studies!
Perpetual Inventory: th-cam.com/video/30BoifG_904/w-d-xo.html
Periodic Inventory: th-cam.com/video/zuY-2w0k1BI/w-d-xo.html
Thank you very much for the explanation and wishes! I get it now. Your videos have been more than helpful. Thank you again.
Thank you Joel. me too I was looking for periodic beginning inventory . Some people they don't ask. If they understood 70% they are satisfied, Accounting is not their Major. When your Accounting is your Major you want to understand it 100%. Good Question.
I'm having trouble understanding. so if you sell 750 units at 12 and it equals 9000. but how and why did you get 3750? by multiplying 750×5=3750. why was this step taken? thanks!
elperrodelace u have to multiply the 750 units by how much u purchased them for instead of how much u sold it for
So periodic deals with time and perpetual deals with each sale.
3:19 How come you multiplied the 750 units by $5/unit instead of the $12/unit?
Because the computation is for COGS. Which means you are going to calculate the cost of the goods that are going to be sold. Since the $5 is the amount you incurred when you purchased the item therefore, it is also the cost used to calculate COGS. On the other hand, $12 is a price set by your company for sale purposes and to earn profit so, it has nothing to do with the COGS computation.
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What does A/R stand for?
Accounts Receivable
I like the Perpetual method lol
It’s not right say the purchase account is not a real account. It is an real account. You need to be more clear as to whether it’s a balance sheet or PL account. Example, if you don’t count your inventory until end of Q1. There is an amount in the purchase account for Jan and Feb. Is the amount on the BS or PL
In this video I explain FIFO, LIFO and average cost methods to value the stocks stored by a company, to estimate the cost of goods sold and to determine the commercial result (profit or loss) of the firm: th-cam.com/video/mOM1Lqqydos/w-d-xo.html.
Why did we multiple 750 with 5
Because each unit sold cost us 5 bucks to purchase