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Inventory valuation

MNmuhammad nayan4y ago
If an entity uses the continuous weighted average cost method to value closing inventory, Which of the following statements is true? A Unit average cost is recalculated each time there is a purchase of inventory B Unit average cost is calculated once only at the end of an accounting period C Unit average cost is recalculated each time there is a sale of goods D Unit average cost is recalculated each time there is a purchase or a sale kit says the answer is A. But I think the answer is C. We calculate cost per unit in continuous weighted average, each time there is a sale of goods please correct me sir, if I'm wrong
John MoffatJohn MoffatTutor4y ago#1
The answer is indeed A. The cost is recalculated every time there is a new purchase. It is only when there is new purchase that the cost is going to be different. Have you watched my free lectures on this?
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