What activities should you perform to correctly account for your inventory at year-end?
If you are using the Average Perpetual valuation method, all receipts for each item will be averaged to determine the average cost. The year-end closing process does not change the average cost. However, it will remove the purchase receipts that have been completely sold. The next time that a receipt is entered, the average cost will be revalued with the receipts that remain in the Inventory Purchase Receipts file.
We do not recommend this because the Beginning Quantity field is updated during the year-end closing process. This would make that field incorrect on reports such as the Turnover report. In addition, all summary sales history information would be incorrectly moved to the following year.
Nov 27th, 2014
Did you know? You can earn $20 for every friend you invite to Studypool!