How does a perpetual inventory system differ from a periodic system?

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Quizplus · Accepted Answer

In a perpetual inventory system, inventory is reduced after each sale because the system is continuously updated for each sale and purchase, providing real-time inventory levels. In contrast, a periodic inventory system only updates inventory levels at the end of an accounting period, often requiring physical inventory counts to determine the cost of goods sold. None of the other options correctly describe the differences between the two systems.

How Does a Perpetual Inventory System Differ from a Periodic