Periodic Inventory System Definition:
Periodic inventory
system is that does not require a day-to-day record of inventory changes.
Costs of materials used and costs of goods sold cannot be calculated
until ending inventories, determined by physical count, are subtracted
from the sum of opening inventories and purchases (or costs of goods
manufactured in the case of a manufacturer).
For calculating the
cost of ending inventory, there are several methods available:
Last-In,
First-Out (LIFO),
First-In,
First-Out (FIFO), and
weighted
average.
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