Question

Differentiate between the continuous method and interval method? Describe its advantages.

Answer 1

If you work in retail, inventory review is a must. You need to know how much inventory you have so you know when and what to reorder. Accurate accounting also needs inventory counts so you can calculate key figures, such as the cost of goods sold. The two review methods are periodic and continuous, or perpetual, inventory. Periodic inventory takes stock every week or month. Continuous inventory constantly tracks inventory quantities so you always know your stock levels.