Explain the Difference Between a Periodic Inventory System and a Perpetual

question 39

Essay

Explain the difference between a periodic inventory system and a perpetual one.If a firm uses a perpetual inventory system,it still has to physically count the inventory on hand at least once a year.Why?

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Definitions:

Fundamental Valuation

The process of determining the intrinsic value of an asset by examining related economic and financial factors.

Operating Cash Flows

Cash generated from the normal operating activities of a business within a specific period.

Business Valuation

The process of determining the economic value of a whole business or company unit.

Financial Condition

The financial condition of a company refers to its ability to meet its financial obligations, sustain operations, and generate profits, evaluated through its financial statements.