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The Average Cost (AVCO) method, or weighted average cost method, offers several advantages, including simplicity and ease of application, as it smooths out price fluctuations over time. It provides a consistent valuation of inventory and helps in financial reporting. However, its disadvantages include the potential for less accurate matching of costs to revenue, particularly in times of significant price changes, and it may not reflect the current market value of inventory. Additionally, it can distort profit margins by averaging out costs, which may not accurately represent the economic reality of specific inventory items.
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What are the advantages and disadvantages of AVCO?
avco is acceptable for the purpose of SSAP 9 and the companies act 1987
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the advantages of deductive method
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Advantages and disadvantages of free hand method?
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What is advantages and disadvantages of distillation?
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What is the advantages and disadvantages of audio lingual method?
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Two advantages and disadvantages of creaming method?
useful
What are the disadvantages and advantages of using the polygon method and the component method?
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