periodic inventory method definition

periodic inventory method

System of inventory control in which no continuous record of changes (receipts and issues of inventory items) is kept. At the end of an accounting period, the ending-inventory is determined by an actual (physical) count of every item and its cost is computed by using a suitable method such as FIFO, LIFO, weighted averages, etc. This amount is subtracted from the sum of purchases (or cost of goods manufactured) and the beginning-inventory of the new accounting period to arrive at the cost of goods sold. See also perpetual inventory method.

periodic inventory method is in the Accounting & Auditing and Inventory Control & Storage subjects.

periodic inventory method appears in the definitions of the following terms: inventory, perpetual inventory method (PIM) and purchases account

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