Periodic Inventory

Periodic Inventory
A method of inventory valuation for financial reporting purposes where a physical count of the inventory is performed at specific intervals. This accounting method for inventory valuation only keeps track of the inventory at the beginning of a period, the purchases made and the sales during the same period and is recorded under the asset section of the balance sheet.

With this valuation method, it is much harder to track which individual items were destroyed or stolen, but a cross-reference can be made with the sales revenue to get a rough estimate of what was sold versus what was not. Many see this method as being inferior to the perpetual inventory method, which keeps track of inventory at the point of sale.

This system is typically used by small businesses that can't afford or don't need an electronic tracking system (i.e. the bar code system).

Investment dictionary. . 2012.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • Periodic inventory — is a system of inventory in which updates are made on a periodic basis. This differs from perpetual inventory systems, where updates are made continuously …   Wikipedia

  • periodic inventory — periodic stocktaking …   Accounting dictionary

  • periodic stocktaking — periodic inventory The counting or evaluating of the stock held by an organization at the end of an accounting period. Movement of stock is restricted during the period of stocktaking …   Accounting dictionary

  • Inventory valuation — INVENTORIES AND FINANCIAL STATEMENTS Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements. If inventory is not properly measured, expenses and… …   Wikipedia

  • Периодическая инвентаризация (PERIODIC INVENTORY)  — Метод определения остатков запасов, заключающийся в сравнении реально подсчитанных на конец каждого периода остатков с данными по остаткам согласно учетным регистрам; поступления запасов в течение периода учитываются на счете закупок, а не на… …   Словарь терминов по управленческому учету

  • Perpetual inventory — In business and accounting/accountancy, perpetual inventory or continuous inventory describe systems of inventory is which the inventory as recorded or displayed in the firm or organization s information system is updated on a continuous basis… …   Wikipedia

  • physical inventory — 1. Audit procedures devised to obtain evidence of the existence, condition, and physical quantities of inventory. The counting of inventory quantities is normally performed on a sample basis, especially when the volume of inventory makes a full… …   Auditor's dictionary

  • perpetual inventory — PI A system of inventory control that regularly updates inventory quantities. A PI system may be *real time, or there may be a slight delay between inventory movements and the updating of inventory balances. Auditors often place reliance on PI… …   Auditor's dictionary

  • National Resources Inventory — The National Resources Inventory (NRI) is a periodic survey of status and changing conditions of the soil, water, and related resources on private land conducted by USDA’s Natural Resources Conservation Service (NRCS). The survey has been… …   Wikipedia

  • Adjusting entries — In accounting/accountancy, adjusting entries are journal entries usually made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred. The revenue recognition principle is the basis of… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”