- This topic has 1 reply, 2 voices, and was last updated 2 months ago by
John Moffat.
John Moffat.-
Posts
-
jermy01
- Topics: 36
- Replies: 22
- ☆☆
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 salekit 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 Moffat
- Topics: 57
- Replies: 49902
- ☆☆☆☆☆
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?
jermy01
John Moffat- You must be logged in to reply to this topic.