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ACC340
Week 6 Problem Sets
Grantham University
Week 6 Problem
Sets
Chapter 15: P 15-5, page 612
Based on the inventory process control goals discussed in this chapter, explain the
impact of using a periodic inventory process instead of a perpetual process. Be sure to also
discuss how you would design the process to attempt to meet the same control objectives
using this periodic process.
Answer:
Small businesses use periodic inventory management systems most of the time
as this is the best. Most small businesses still use periodic inventory systems, but more
and more perpetual inventory systems have become increasingly popular due to the
computer scanning of inventory, increased software, and how it works along with
lower software costs.
When using periodic inventory systems a company tracks its beginning and
ending inventory in the accounting period. This does not track inventory daily. These
companies that use this type of system have employees that physically count the
inventory. Smaller companies that do not have the staff or money to work a perpetual
inventory system will use the periodic inventory system.
A Perpetual inventory system tracks the inventory balance after each
transaction. This makes it much easier to keep track of the inventory by not having to
close the business to physically count the inventory. With a perpetual inventory system,
each inventory item

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ACC340 Week 6 Problem Sets Grantham University Week 6 Problem Sets Chapter 15: P 15-5, page 612 Based on the inventory process control goals discussed in this chapter, explain the impact of using a periodic inventory process instead of a perpetual process. Be sure to also discuss how you would design the process to attempt to meet the same control objectives using this periodic process. Answer: Small businesses use periodic inventory management systems most of the time as this is the best. Most small businesses still use periodic inventory systems, but more and more perpetual inventory system ...
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