Yes, along with FIFO and LIFO, Weighted average is a generally accepted accounting principle.
once
Moving average inventory method is not GAAP (generally accepted accounting principles). LIFO (last in, first out) or FIFO (first in, first out) are GAAP. FIFO is the most common method and easy to compute; however LIFO may be used but is much more complicated to compute unless your businesses computer system computes the LIFO computation.
GAAP stands for generally accepted accounting principles, and a physical inventory is needed when using GAAP. One reason it is necessary is, if you don't account for your shrinkage by doing a physical count, your total ending inventory costs will be inflated.
One can use FIFO, LIFO, or Average Costing as acceptable methods for accounting. Standard costing would be an unacceptable answer.
How does GAAP affect financial reporting?
once
The weighted average method is advantageous because it smoothens out fluctuations in inventory costs by incorporating both old and new cost data. It is simple to calculate and less subject to distortions from extreme price changes. This method is also compliant with generally accepted accounting principles (GAAP).
Yes, LIFO (Last In, First Out) is allowed under GAAP (Generally Accepted Accounting Principles) but it is less commonly used compared to FIFO (First In, First Out) due to its impact on inventory valuation and tax implications.
Moving average inventory method is not GAAP (generally accepted accounting principles). LIFO (last in, first out) or FIFO (first in, first out) are GAAP. FIFO is the most common method and easy to compute; however LIFO may be used but is much more complicated to compute unless your businesses computer system computes the LIFO computation.
GAAP stands for generally accepted accounting principles, and a physical inventory is needed when using GAAP. One reason it is necessary is, if you don't account for your shrinkage by doing a physical count, your total ending inventory costs will be inflated.
The GAAP method for obsolete or slow moving inventory is to account for all inventory using either market value or cost method. The method which results in the lower amount is the one that is used.
One can use FIFO, LIFO, or Average Costing as acceptable methods for accounting. Standard costing would be an unacceptable answer.
Hello - I use the value the inventory was purchased at. If you need to, then you can devalue the inventory by stating a write down on obsolete goods, or alternatively, product that you will have to take a discount on. Technically, you have a few options - LIFO (last in, first out), FIFO most common - First in, first out, and average - average is not GAAP in Canadian accounting, but is workable in the states. Hope this helps you!
There are several costing items that has change in the adoption of IFRS, for in GAAP the stock valuation or material pricing adopted is LIFO and FIFO but in IFRS only FIFO is adopted etc
gaap
short note on GAAP
How does GAAP affect financial reporting?