You have decided to open up a small convenience store in your hometown. As part of the initial set-up process, you need to determine whether to use a perpetual inventory system or a periodic inventory system.

a. Compare the perpetual and periodic inventory systems.

b. Describe the benefits and challenges of each system as it relates to your industry and to your business size.

c. Compare at least one example transaction using the perpetual and periodic inventory systems (a purchase transaction, for example).

d. Describe the impact each system has on your financial statements.

e. Decide which system would be the best fit for your business, and support your decision with reasons.