Which method periodic vs perpetual inventory entails simplier bookeeping on a daily basis.?

Answer 1

The periodic inventory system is the simpler method. Under this system, you merely chalk up purchases throughout the year. You don't maintain a COGS account so when you make a sale, you just record the sale
Dr Cash or A/cs receivable
Cr Sales

Come end of the year, you count your inventory and make your COGS adjustment. For e.g. you make purchases and sales throughout the year, and let's assume your opening inventory plus all your purchases total 100k. You don't know your COGS. It's year-end and you count the inventory in the warehouse. They come up to 20k, so the COGS must be 80k.

However if you use the perpetual inventory system, every time you make a sale, you have to make a COGS entry as well, so definitely this method will entail more work on a daily basis.

Answer 2

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