Doubt in simple accounting policy

Fifo-first in first out

Vamshi Kumar

CA Final

★ 1K+

14-Nov-22 21:00

Then what about Weighted average

Thread Starter

Saketh Reddy Kotla

CA Foundation

★ 21K+

14-Nov-22 21:04

Weighted average

Vamshi Kumar

CA Final

★ 1K+

14-Nov-22 21:15

Fifo- it is first in first out in which we first sell off goods which are older/earliest inventory... In Weighted average say,balance inventory of previous month is 800*52.5=42k...and of receipt of goods now say,mid of month is 300( quantity)*55(amt.)=16500,then weighted average price of the balance inventory is 42000+16500/800+300= 53.18....here we,calculate weighted price of the inventory and multiple with quantity to get bal. Inventory

Yamuna S

CA Inter

★ 15K+

14-Nov-22 21:21

In the later,we don't consider the price of earlier/latest inventory...we just calculate weighted price

Yamuna S

CA Inter

★ 15K+

14-Nov-22 21:23