under periodic inventory system

under periodic inventory system, businesses calculate inventory levels and cost of goods sold (COGS) at specific intervals rather than in real time. This system is suitable for companies with limited inventory fluctuations or those operating in traditional retail environments. During the accounting period, purchases are recorded without adjusting inventory levels until a physical count is conducted. While simple to implement, it lacks the accuracy of perpetual systems and can lead to stockouts or excess inventory. Nonetheless, it’s cost-effective and works well for businesses with low SKU counts or seasonal operations.