Moving Average Costing — Assessment

1. An item holds 100 units at an average of KES 50. A receipt of 100 units at KES 70 arrives. What is the new average?

KES 120 KES 50 KES 70 KES 60

2. An item sells out completely. What is its cost when the next delivery arrives at KES 90?

The buying price on the item card KES 90 — with nothing on hand, the receipt sets the cost outright Zero until a count is done The average before it sold out

3. A clerk types a unit cost on a check-in line that is also against a purchase order. Which cost does the receipt carry?

The typed unit cost The buying price The current average The purchase order price

4. A purchase order is tax-inclusive at KES 116 a unit with 16% VAT. What cost does a check-in against it contribute, before currency conversion?

KES 116 KES 100 — the price net of tax KES 134.56 The buying price

5. A count finds 5 more units than the books show. At what cost do they come in?

The selling price The last purchase order price Zero The item’s current average, so the cost does not move

6. What does a supplier check-in now post to the ledger?

Dr Cost of Goods Sold, Cr Inventory Dr Inventory at the buying price Nothing until the bill is approved Dr Inventory, Cr payable or clearing, at the receipt’s cost

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