Jackie wants to start a business selling skateboards. She doesn’t have a lot of money to purchase much other than the skateboards themselves. She doesn’t plan to rent a building or even an offi ce. She plans to set up a booth at skateboarding competitions, and she will sell her skateboards right there. She has asked your advice about keeping track of her inventory of skateboards. She hasn’t taken an accounting class, but she read online that she has to use something called the periodic or the perpetual inventory systems. She doesn’t understand why there are two diff erent systems, and she doesn’t know which one would be best for her business. She doesn’t know much about accounting or fi nancial statements, and she is asking you for help. 

Instructions 

In a memo to Jackie, answer the following. 

a. What is a periodic inventory system? What is a perpetual inventory system? 

b. Which system should Jackie use and why?