Wize University Introduction to Financial Accounting Textbook > Merchandising

Perpetual Inventory System

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Perpetual Inventory System
The perpetual inventory system is the most widely used system for recording inventory and cost of goods sold. 
Characteristics of the Perpetual Inventory System
Continuously (perpetually) updates merchandise inventory and cost of goods sold account
Inventory and cost of goods sold always recorded at the time of a sale
Inventory always recorded at the time of a purchase

Extra Practice

Inventory

Wayne Corp sells t-shirts. Wayne’s inventory information for the month of January is found in this table:
Wayne Corp uses the perpetual inventory system and the weighted average costing method. All purchases and sales are made on account.
Round to the second decimal place (example: $1.25).