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Billing

How stock is valued: the moving average

Inventory Management

Answer Summary

Every item carries one moving average cost in your workspace currency, and every receipt moves it before the stock lands: new average = (on hand × old average + received × receipt cost) ÷ (on hand + received). A receipt costs at the unit cost typed on the check-in, else the purchase order price net of tax and converted at the order's rate, else the current average. The receipt journal posts at that same cost, and valuation, dead stock, turnover and ABC reports read the average.

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