Both periodic and perpetual journal entry are important but there are some certain differences between periodic and perpetual journal entry which are discussed below:
Differences between periodic and perpetual journal entry
Periodic Journal Entry
The journal entry which records the financial events within an accounting period is called periodic journal entry.
It always maintains a specific accounting period for determining a periodic financial statement.
It may use the gross method or net method, but always shows a single monetary value for each entry.
Example:
December 15, 2021,
Purchase 500
Cash 500
December 30, 2021,
Freight-in 500
Cash 500
December 31, 2005,
Cash 500
Sales 500
Perpetual Journal Entry
The journal entry which records the financial events within a continuous accounting period is called perpetual journal entry.
It always maintains a continuous accounting period for maintaining a perpetual inventory valuation.
It may use a gross method or net method but always shows double monetary values for sales entry.
It records all purchases items into merchandise inventory.
Example:
December 15, 2021
Merchandise Inventory 500
Cash 500
December 31, 2005
Cash 500
Sales 500
Cost of Goods Sold 500
Merchandise Inventory 500
Hope this article clear your concept about periodic and perpetual jurnal entry. If you have any openion regarding this content please feel free to comment below.
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