Simplified Accounting
Periodic inventory can simplify how inventory purchase entries are made. All inventory purchases made between physical counts are entered in a purchasing account. There's no need to set up multiple accounts or to burden accounting with needless purchasing complexities. Only at the time of the physical count is the purchasing amount added to the previous inventory count to determine the cost of goods available to sell. Subtracting the ending inventory value from cost of goods available equals the cost of goods sold.