If a company uses the FIFO cost assumption, ?

Question

the cost of goods sold for the period will be the same under a perpetual or periodic inventory system.

True?

Answer 1

Yes, this is true, but remember, only for FIFO.

With perpetual FIFO, the first (or oldest) costs are the first moved from the Inventory account and debited to the Cost of Goods Sold account. The end result under perpetual FIFO is the same as under periodic FIFO. In other words, the first costs are the same whether you move the cost out of inventory with each sale (perpetual) or whether you wait until the year is over (periodic).