1. The company's inventory system as the perpetual inventory system.

2. This system is called perpetual inventory system .

3. An alternative to the perpetual inventory system which eliminates the need for recording the cost of goods sold as sales occur.

4. Under the perpetual inventory system, the Merchandise Inventory and Cost of Goods Sold accounts will always show the balance of merchandise on hand and the total cost of goods sold for the period.

5. In the perpetual inventory system, the business keeps a continuous record for each inventory item.

6. But in perpetual inventory system, cost of goods sold is record each time a sale is made.

7. Physical inventory at fixed periods must be taken under either perpetual inventory system or periodic inventory system.

8. The two alternative approaches to the determination of inventory and of cost of goods sold are called the perpetual inventory system and the periodic inventory system .

9. The following entries demonstrate the recording procedures to be followed under the perpetual inventory system , as contrasted with the periodic inventory system .

10. Acquisition of Materials:Materials inventory account rather than purchases account will be debited under a perpetual inventory system.

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11. The accounting recording procedures are different under the periodic inventory system and the perpetual inventory system.

12. Examples of other general ledger accounts that often have subsidiary ledgers are Inventory(in a perpetual inventory system), Equipment, and Buildings.

13. We collect the data form our case company and use periodic system , perpetual inventory system , and two bin system to solve the problem of limited stock capacity and the constraint of no shortage.