What is a periodic system of inventory?
The periodic system of inventory is an inventory system used by a business to control inventory.
The inventory balance is shown on the inventory account, and remains the same until a physical inventory count is carried out at the end of the accounting period (hence periodic).
The periodic system of inventory control is used by small businesses as it avoids the need for a perpetual inventory system which tracks each item of inventory in and out of the business.
For further information on periodic inventory systems see the Wikipedia definition.
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About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.