Perpetual vs periodic system

[wichertj]

I know that under FIFO perpetual vs periodic inventory systems yield the same result. Can someone explain the differences between perpetual or periodic systems using LIFO or Weighted Average?

Thanks!

[S2000magician]

Perpetual LIFO and perpetual average cost are closer to FIFO than their periodic counterparts are.

[wichertj]

@S2000magician

Perpetual LIFO and perpetual average cost are closer to FIFO than their periodic counterparts are.

Thank you for your help!

What about other measurements like COGS, profit margin?

[busprof]

Under rising prices, LIFO COGS will be lower (and Profits higher) under perpetual inventory than under periodic (in essence, you end up allocating more of the “lower cost level” costs. And since there’s an inverse relationship between COGS and ending inventory balances, ending balance will be higher.

Average cost should be in the middle of LIFO and FIFO.

[S2000magician]

For everything that depends on inventory – ending inventory, COGS, gross profit margin – perpetual LIFO and perpetual average cost are closer to FIFO than their periodic counterparts are.

[S2000magician]

@busprof

Under rising prices _ costs _, LIFO COGS will be lower (and Profits higher) under perpetual inventory than under periodic (in essence, you end up allocating more of the “lower cost level” costs.

FTFY