Periodic Inventory System- no entries are made to the merchandise inventory or cost of goods sold account during the year.  Thus, the balance in the merchandise inventory account is based on the physical count of inventory taken at the end of the last accounting period

Perpetual Inventory System- entries are made to the merchandise inventory and cost of goods sold accounts as transactions take place during the accounting period.  The account is debited for the cost of all goods purchased and credited for all the cost of goods sold. 

1.  First In, First Out-  Assumes that first goods purchased were first goods sold.  Therefore, the latest goods purchased remain in inventory   Ex.) grocery stores, fruit stands

2.  Last In, First Out-  Assumes that the sales in the period were made from the most recently purchased goods.  Ex.) Nails (items that don't go obsolete) 

3.  Specific Identification System-  When each unit of inventory can be specifically identified  Ex.) cars, jewelry, furniture

4.  Weighted Average Cost-  Total Cost/Number of Units= average cost per unit.  Multiple total cost by average cost per unit to come up with number.  Subtract from total cost to come up with weighted average cost