Chapter 6, Problem 20Q

To determine

Perpetual Inventory System:

Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Periodic Inventory System:

Periodic inventory system is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

To Explain: Whether the results under LIFO and FIFO are same in perpetual inventory system and in periodic inventory system.