The primary difference between a periodic and perpetual inventory system is that a

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Periodic inventory system only determines the inventory on hand at the end of the accounting period, whereas a perpetual system keeps a record showing the inventory on hand at all times. This means that in a periodic inventory system, the cost of goods sold is calculated by subtracting the ending inventory from the cost of goods available for sale. In contrast, in a perpetual inventory system, the cost of goods sold is calculated continuously as each sale is made, and the inventory is adjusted accordingly in real-time.

The Primary Difference Between a Periodic and Perpetual Inventory System