If the same purchase and sale transactions are recorded using both periodic and perpetual inventory valuation, which method will provide the same ending inventory and value of COGS under both periodic and perpetual inventory valuation?

Question

Business

Zoey Ayala

20 December, 21:33

If the same purchase and sale transactions are recorded using both periodic and perpetual inventory valuation, which method will provide the same ending inventory and value of COGS under both periodic and perpetual inventory valuation?

+3

Answers (1)

Know the Answer?

Caprice · Answer 1

Weighted Average Cost method provides same ending inventory value and same COGS under both periodic and perpetual inventory valuation.

Explanation:

Weighted average method records all the inventory on average cost. It does not matter how and when inventory is counted, purchased or sold. It averages cost of every unit which comes in the inventory or goes out of inventory. Other valuation method LIFO and FIFO changes the value with change in time or frequency.