If a company uses a periodic inventory system, the shipping records are used to update the inventory quantities.

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In a periodic inventory system, the inventory quantities are updated only at the end of the accounting period (usually monthly, quarterly or annually) by taking a physical inventory count. Shipping records are not used to update inventory quantities in a periodic inventory system. In contrast, a perpetual inventory system updates inventory quantities continuously through the use of computerized records, including shipping records.

If a Company Uses a Periodic Inventory System, the Shipping