Perpetual – The change in quantity is recorded as it happens on a daily basis; as is the cost of what was sold. And cost is the key difference. In a perpetual system when you sell something the cost is immediately sent to COGS, this also reduces the inventory asset account. As a result you can pull a P&L anytime you want because the COGS account is up to date. And of course if the COGS account is up date so is the inventory asset account.

Most perpetual systems are FIFO, LIFO, and specific cost which QB does not handle (without a work around). QB keeps average cost.

Periodic – In the periodic system the quantity is updated when you buy or sell. But COGS does NOT get an entry when you sell. In the periodic system you physically perform an inventory count, then you value what is on hand. You subtract the on hand value from the total inventory book value to get the value of what is missing (hopefully it was sold). Then you make a journal entry to move that value out of inventory asset and into COGS. In order to have an accurate P&L you must do the physical inventory, value it, and make the journal entry for COGS.