Merchandising operations--------- Merchandise generally means inventory. Merchandising operations includes purchasing, selling, collecting and payment activities. The ongoing operations are designed to improve cash flow.
Perpetual Inventory System -----------Under perpetual inventory system, updates for purchase and returns are immediately recorded in inventory accounts. Updates are automatically made when you receive or sell the inventory. It keeps continual track of balances.
Periodic Inventory System------------under this system, inventory updates are done on periodic basis not on continual basis. The amount of inventory is determined at the end of each accounting period or specified period.
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