Perpetual Inventory System And Inventory Valuation Methods

Week 3 Discussions and Required Resources

Part 1 and Part 2 must be at least 200 words


Part 1: Perpetual Inventory System


Present a detailed explanation of the recording of purchases under a perpetual inventory system. Use hypothetical figures to illustrate the perpetual inventory     system. After presenting your hypothetical figures, discuss how a perpetual     inventory system is different from a periodic inventory system. Your answer     should illustrate understanding of the perpetual inventory system. 

Part 2: Inventory Valuation Methods



Identify the differences   between F.I.F.O., L.I.F.O., and the average-cost method of   inventory valuation.  Be sure to include the effects of each method   on cost of goods sold and net income in   your answer. Also discuss the differences between the physical movement of   goods and cost flow assumptions. Your answer should illustrate understanding   of the three major inventory valuation methods, and the relationship between   physical inventory flow and cost flow assumptions.

Required Resource


Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2016). Financial accounting: Tools for business decision making (8th ed.). Retrieved from

Chapter 5: Merchandising Operations and the Multiple-Step Income Statement

Chapter 6: Reporting and Analyzing Inventory

(Chapters 5 & 6 are in the attachments) 

Recommended Resources


Bloom, R., & Cenker, W. J. (2008, December 31). The death of LIFO?. Journal of Accounting. Retrieved from


Textbook Student Companion Site .

Review the PowerPoint presentations for Chapter 5 and Chapter 6 found on the textbook publisher’s website. 

(Chapters 5 & 6 PowerPoints are in the attachments)

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