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Periodic vs Perpetual Inventory Accounting

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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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Опубликовано:

28 авг 2024

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Комментарии : 75

@rob8482 7 лет назад

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!

@Edspira 7 лет назад

Thank you for the kind words my friend! I always enjoy seeing your thumbnail photo :)

@hahahat47 6 лет назад

I really love the way you deliver the knowledge because you are good at expressing what's on your brain. my professors are not good at it.

@Edspira 6 лет назад

Thanks!

@cinderelly00 7 лет назад

I've watched so many of your videos now and they've helped immensely!! You're an amazing teacher!!

@geekymalcolmx9070 5 лет назад

I know im not the only one who quickly subscribed after seeing how this guy has made everything so easy

@louiegandionco6756 6 лет назад

This video is very useful because we can learn how to do inventory and what is it about.

@Edspira 6 лет назад

Great. I'm glad you found this useful!

@yashwanthramaswamy7277 7 лет назад

I am so happy at last i could find a very understandable video on this topic very useful, keep on the good work

@TheMdsafwan07 6 лет назад

look through alot of accounting videos, this had to be the best. clear understanding with your video. God bless and thank you

@Edspira 6 лет назад

Wow. Thanks so much for this boost of confidence! Take Care.

@lisaaskin630 6 лет назад

I should have picked this video first. totally understand now thank you

@DUSAbruddah 8 лет назад

Life saver

@rjeption 3 года назад

watching this for my accounting class, thank you

@kaustav19921 6 лет назад

You have helped me in such a critical time. Thank you sir so much

@kylejayanun6326 5 лет назад

Man you made it sound so simple

@eaae 4 года назад

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: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-mOM1Lqqydos.html.

@lydiarobles211 3 года назад

Thank you so much for this video. You have no idea how much it helped!

@sabas4017 5 лет назад

wow you did an awesome job !!! god bless you for you awesome job that made my job so easier !

@damounkaoutar538 3 года назад

thank you

@syazazaini8294 5 лет назад

thank you so much. I'm from Malaysia

@thomashoffmann6332 2 года назад

You are a godsend!

@Edspira 2 года назад

Happy to help!

@phuonghoanguyen9772 Год назад

Thanks for the video

@chieyours Год назад

i finally understand 😭 thank you so much

@gerardpatataspidio2596 3 года назад

Very clear and understandable.

@MyFinancialFocus 2 года назад

So periodic deals with time and perpetual deals with each sale.

@johnthor4021 5 лет назад

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?

@ZufashPlaytime 7 лет назад

I just Love that ..... May GOD BLESS YOU SIR (Y)

@green5594 Год назад

goated content

@alexjunquera9128 3 года назад

Thank you for the content. Really appreciate it.

@calebbyers 11 месяцев назад

Perpetual seems to make so much more sense and seems much more straightforward and organized. Why would a company even want to use periodic?

@Joeljv91 6 лет назад

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?

@Edspira 6 лет назад

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: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-30BoifG_904.html Periodic Inventory: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-zuY-2w0k1BI.html

@Joeljv91 6 лет назад

Thank you very much for the explanation and wishes! I get it now. Your videos have been more than helpful. Thank you again.

@ube-23s 5 лет назад

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.

@fluffylorax8052 2 года назад

i have an issue where i play clash royale all class so this helps a lot

@adriennejones2148 3 года назад

Very helpful. Thank you!

@Ayeshakhan-ji5mn 7 лет назад

thankyou so much it helped me a lot☺

@Edspira 7 лет назад

That's great to hear!

@mudasirhussain9947 6 лет назад

thanks so much ,, very helpful ... One question ,, what if the purchases we made are at different rate than starting inventory ?

@Edspira 6 лет назад

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: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-zLAvpS6o25E.html FIFO: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Wa83L8TvoaM.html Average Cost: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-qAWVVw-dC5A.html Thanks for watching!

@serifetuz6363 3 года назад

Clear dude!

@barnabasretta1600 3 года назад

Tnk u that is all i can say

@Edspira 3 года назад

No problem!

@SabrinAlzahrani 3 года назад

you rock!

@Edspira 3 года назад

Thank you!

@beomkomap 4 года назад

Thanks sir. you cleared my doubt.

@Talia778real 7 месяцев назад

Appreciate🙏

@yuju1195 4 года назад

Thank you so much this wassuch a huge help

@NightingaleJordan 8 лет назад

thank you so much!

@vinnasugue7957 5 лет назад

Thank you ☺

@risingisaac1394 8 месяцев назад

3:19 How come you multiplied the 750 units by $5/unit instead of the $12/unit?

@mohdraishansbinmuhamadisa4056 8 месяцев назад

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.

@charmainechin9249 7 лет назад

Dear Edspira, your voice reminds me of Foodwishes here on youtube! Are you related? :)

@Edspira 7 лет назад

Unfortunately not, but it's funny you should mention that. People have said I sound like Foodwishes and also the actor John C Reilly :)

@Jessica-jp7vu 3 года назад

amazinggggggg explanation! :]

@elperrodelace 7 лет назад

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!

@louisbravo5859 7 лет назад

elperrodelace u have to multiply the 750 units by how much u purchased them for instead of how much u sold it for

@prajnanks 6 лет назад

Great video

@najmulhasanaashrafi2510 5 лет назад

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???

@rawanalzubi6144 7 лет назад

Thankyouuu!

@Edspira 7 лет назад

No problem!

@samorraalolo6939 7 лет назад

thanks alot

@Edspira 7 лет назад

Happy to help!

@chuckf3109 5 лет назад

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?

@kongcrit 3 года назад

Btw how the income statement calculation? Is same both method??

@orangekitsune6907 6 лет назад

What does A/R stand for?

@Edspira 6 лет назад

Accounts Receivable

@afikax8933 4 года назад

A little off topic, but i really think you sound like cam from modern family

@andhywilliams 5 лет назад

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