What is the difference between a perpetual inventory system and periodic inventory system as it relates to computing cost of goods sold?

Refer to Chapter 5 pages: 244 – 245 and Illustration 5-3 on page 229

Illustration 5-4 demonstrates the difference between a Perpetual Inventory system and that of a Periodic inventory system.

Write a 200 word paragraph answering the following questions:

• Describe the flow of cost.
• How would you calculate cost of goods sold?
• What items make up cost of goods sold?
• What is the difference between a perpetual inventory system and periodic inventory system as it relates to computing cost of goods sold?