The difference between periodic and permanent registration method
Since in most of the economic enterprises the major part of the assets is the inventory, it is very important that the inventory control is of special importance both in terms of Rials and in terms of numbers, and the senior managers of the economic enterprises are required to use an efficient method for this matter. make it important Therefore, accounting science has also tried to meet their needs in different ways. For this reason, accounting science has introduced two methods for keeping inventory to economic enterprises:
Periodic registration method, permanent registration method
Periodic registration method:
In this method, the inventory account is not used during the purchase and sale, but the purchase account is debited during the purchase and the sales account is credited during the sale. , calculates the inventory account.
In the past, the periodic method was used in commercial enterprises that have low-priced but high-circulation goods, such as supermarkets, Kharazi, etc., but today, due to the existence of mechanized accounting systems, the permanent method is used in most commercial enterprises.
Advantages and disadvantages of periodic method:
Because in the registration of accounting documents, the inventory account is not used, it is inevitable that in the periodic method, it is not possible to report the current inventory of goods, and according to the needs of business managers, even businesses with low prices and high transactions such as supermarkets, Kharazi And… according to Kardex goods report (goods turnover) and inventory report of individual goods, the method of permanent registration is a more suitable method for everyone.
Permanent registration method:
In the second method of recording the purchase and sale of goods, it is always recorded in an account called the inventory of goods, and accounts called the purchase and sale account are no longer used. So, when buying, the inventory account is debited by the amount of the purchase invoice, and when selling, the inventory account is credited by the cost of the sold goods.
Permanent document registration method:
When buying goods:
Inventory account: debit
Cash/Bank Account/Payroll/Payable Documents/Account Payable: Creditor
When selling goods:
Cash account/bank account/payroll/documents receivable/account receivable: debtor
Sales Account: Creditor
Cost of goods sold account: debit
Inventory account: Creditor
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This post is written by mda140