Perpetual vs. Periodic inventory systems - an overview
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Video Overview

Keeping track of inventory is important for any business as inventory is an asset. Also note that determining gross profit on an item and being able to determine cost of sales are equally important. There are two inventory systems available to choose from, the first being the perpetual inventory system, also known as the continuous inventory system, and the periodic inventory system. These inventory systems are quite different in nature as different general ledger accounts are affected. Although you will learn about both of these systems in-depth at a later stage, this tutorial will give you a brief overview of the two systems so you are aware of the differences and in which type of business set up you might choose to use them.