The Lazy Person’s Approach to Stock

The stock accounting approach that we describe in the previous sections is the textbook approach. What’s more, the approach is a really good one because it lets you accurately calculate your cost of goods sold and accurately estimate the value of the stock you’re holding.

You should know, however, that you can also use a simpler approach to stock accounting. Specifically, rather than keeping track of individual stock items by using a perpetual stock system – this simply means that you track each item when it moves into your business and out into a customer’s car or minivan – you can use a simple periodic system. In the sections that follow, we tell you how a periodic stock system works in QuickBooks. Then we tell you what’s bad and what’s good about using a periodic stock system.