In order to inventory, determine what is available and what has already been sold and determine the cost of the goods sold, there are two inventory inventory systems: the periodic inventory system and the continuous inventory system. The accounting treatment of the operations of the goods varies according to the system on which the entity relies on the stock inventory and the cost of the goods sold.

Continuous inventory

It is useful to know the balances of the stock values at any moment and at the end of the financial cycle of the stock / inventory balance in the accounts with the periodic inventory to match how much and we know the cost of sales from the cost of the goods sold with the accounts at any time.

And only one account, which is H / inventory, it is the purchase and the disposal of the disposal.

Periodic inventory

This feature is not available since the balance can only be identified by the end of the financial cycle with a periodic inventory.

Open in this case h / net purchases, h / stock first time, h / stock of the last term.

It is worth mentioning that the Orchida ERP accounts program works in two ways. Moreover, the accounting program automatically checks the cost of each transaction. This gives you the freedom to choose between the two methods and enjoy the features of each system. Periodic and continuous inventory explanation You can also view the rest of the properties Program Stores

Important questions

What is the cost of sales in the periodic inventory system and the continuous inventory system?

- Periodic Inventory System: - Cost of Sales = First Inventory + Net Purchases - Other Inventory
Net Purchases = Purchases + Transportation Expenses - Returns on Purchases - Discount of Quantity - Earned Cash Discount
Where both the first inventory and the elements of net purchases are closed for trading, the other inventory is recognized in the trading account.
- Continuous Inventory System: - We get the cost of sales from the item card

Are stocks last term shows the trial balance?

In the case of the periodic inventory system does not show another inventory period of the balance of review, but in the case of continuous inventory system shows another inventory period of balance

What is the purpose of inventory?

To detect a deficit or increase until the appropriate entry is prepared because the stock shown in the balance sheet is the actual balance

What is a trading account?

The balance reflects the total profit or total loss and is obtained by sales - cost of sales
To reach the cost of sales is different in the case of periodic inventory system than in the continuous inventory
- Periodic Inventory System: - Cost of Sales = First Inventory + Net Purchases - Other Inventory
Net Purchases = Purchases + Transportation Expenses - Returns on Purchases - Discount of Quantity - Earned Cash Discount
Where both the first inventory and the elements of net purchases are closed for trading, the other inventory is recognized in the trading account.
- Continuous Inventory System: - We get the cost of sales from the item card

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