The cost of goods in closing inventory and the cost of goods sold would have been easy to determine if purchase prices and other inventory costs never changes. Due to price fluctuations the companies are forced to make certain assumptions to calculate the cost of goods that have been sold and those remaining in the inventory at the closing date. The company can use any of the system periodic or perpetual to record its inventory. Under Periodic Method the inventory records does not shows the amount of goods available for sale or the amount of the goods sold during the period