Perpetual and Periodic
Inventory in the Mall
| Overview | Data | Conclusion | Online Resources |
A sample survey of twelve retailers at the Wyoming Valley Mall was conducted to evaluate the current inventory practices used.
The following questions were asked of store managers:
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Does the business use a perpetual or a periodic inventory system? |
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How often does the manager conduct a physical inventory count? |
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During the count, is the store shut down or does business continue? |
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If the store uses a computer system to register sales, how are transactions recorded when the computer system goes down? |
Responses are displayed below.
| Store Name | Type of Inventory System Used | Frequency of Physical Counts | Close Store During Inventory? | If Computer System Fails? |
| Auntie Anne's Pretzels | Periodic | 1/week | No | No computer system used |
| Champs Sports | Perpetual | 2/year | No | Manual Receipts |
| Disney Store | Perpetual | 2/year | After Hours | Close Store |
| Express | Perpetual | 2/year | No | Manual Receipts |
| Gallery of Sound Music | Perpetual | 1/week | Yes | Manual Receipts |
| Gap, The | Perpetual | 2/year | After Hours | Close Store |
| Kay Bee Toys | Periodic | 1/year | After Hours | Manual Receipts |
| Littman Jewelers | Perpetual | 4/year | No | Manual Receipts |
| Matthew's Hallmark | Perpetual | 1/year | No | Close Store |
| Sears | Periodic | 1/year | Yes | Manual Receipts |
| Spencer Gifts | Perpetual | 1/year | No | Manual Receipts |
| Victoria's Secret | Perpetual | 2/year | No | Manual Receipts |
According to the data obtained, it can be concluded that most stores use a perpetual inventory system with a physical count taken one or two times per year. These stores also choose to remain open during the inventory count. If the computer systems were to fail the majority of stores surveyed would perform manual transactions instead of closing the store. There was no apparent relationship found between the type of store and the type of inventory system used or the type of inventory system used and the frequency of the physical count(s).
"CIMS Perpetual Inventory Management System." 2000. accessed 10 Nov. 2000.
http://www.greatlakessoftware.com/products/inventory.html.
This site offers users a multitude of inventory information. Designed to sell the CIMS Inventory System, the web page still offers products, services, monthly tips, downloads, links, company information, technical support, and news related to perpetual inventories.
"Food Costing and Management." 09 Nov. 2000. Tracrite Software. accessed 10 Nov. 2000.
This site is owned and operated by a "team of Restaurant Owners and Computer Professionals" who targets users interested in the restaurant business. There is information about food costs, inventories, catering, menu building, sales tracking, recipe costing, invoices/expenses, and reporting. A forum for questions is also available along with direct methods of contacting the business.
"Intermediate Accounting I." 1999. Washington State University. accessed 13 Nov. 2000.
http://www.eus.wsu.edu/edp/courses/guides/acctg330x/l7.htm.
A summary of a textbook chapter, this site offers a detailed explanation of inventories, freight, consignments, and costing methods. The language is easy to understand making this site accessible to anyone.
"Inventory." 2000. MYOB. accessed 14 Nov. 2000. http://www.myob.com.au/support/notes/inventory/.
Includes detailed information pertaining to inventories, consignments, trade-ins, stock, and retentions. Email updates are offered along with information on other accounting practices. The language is clear and concise appealing to many different users.
"Inventory (Merchandise for Resale or Chargeback)." 12 Oct. 1999. University of Illinois.
accessed 13 Nov. 2000. http://www.audits.uillinois.edu/dept/CAT-7.htm.
Part of a Self-Assessment Survey Questionnaire, this page offers answers to five questions asked about inventory practices. Both a policy and an explanation are given as answers. The language used is often complex and would be difficult to understand without an accounting background.
"Inventory Procedures for Retail Merchandise." Sept. 1995. University of Illinois. accessed 08 Nov. 2000.
http://www.oba.uiuc.edu/manual/se5-8-1.html.
Part of the Office of Business and Financial Services of the University of Illinois, this site offers information on how to conduct and calculate inventory. Tips on planning, counting, and adjusting inventories are given, along with actual examples and figures.
"INVENTORIES--PHARMACY/PLANT OP/STORES/PRINT SHOP/OTHER." 5 May 1997. California State
University. accessed 13 Nov. 2000.
http://www.calstate.edu/tier3/acct/GAAP/GAAP%20Manual/gaapPDF/sec2-2.html.
This site describes "the basis of accounting for inventories" in an essay format. The central focus is accounting for inventories on a college campus. The information is not extremely detailed, yet still provides key ideas and real-life examples of inventory systems.
"Periodic and Perpetual Methods of Inventory Recordkeeping." An Introduction to Financial Accounting. 19 Aug.
1997. Queens University. accessed 13 Nov. 2000. http://qsilver.queensu.ca/~comm111/notes/FINACC05/sld024.htm.
Designed as part of a slide show for University students, this single slide provides a simplistic summary of the differences between periodic and perpetual inventory methods. Although not for in-depth research, this site clearly states ideas and offers the user an index of other topics.
"Unit 9: Inventory." 10 Nov. 2000. accessed 16 Nov. 2000. http://www.businessbookmall.com/zsfinao1.htm.
Used for educational purposes, this site offers detailed explanations about the principles of inventories for anyone interested in obtaining a stronger grasp of the basics. Examples of different inventory costing methods are provided.
"Washington Inventory Service." 06 Nov. 2000. Huffy Company. accessed 16 Nov. 2000. http://www.wisusa.com/
Designed as the website for Huffy Corporation, this site offers businesses information about the inventory counting services they offer. Reasons for the need of a valuable inventory system are given along with recent news, job postings, and future practices. Not to be used for research purposes, this site still is valuable to businesses.
Site Created and Maintained by Therese Adelizzi, Marc Decowski, Megan Minor, and Becky Sandroski.
Students of Intermediate Accounting I (Acct 260) at King's College