Dear tutor,
Can you please explain why with the AVCO method the valuation of inventory rarely reflects the actual purchase price of the material?
I think LIFO should be the one that has that problem because the remaining inventory has the price of the oldest purchases. Therefore, it rarely reflects the actual purchase price, whereas AVCO gives a better valuation compared to LIFO.
Thank you in advance for your help!
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AVCO vs LIFO
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