Fifo lifo avco

sarahtann

I can never work out what method the stock record card is using??
Does anyone have any tips or explanations:001_smile:

CJC77

sarahtann wrote: »

I can never work out what method the stock record card is using??
Does anyone have any tips or explanations:001_smile:

I do 2 things, but always cross check them....Oh, and I waffle a bit as I explain it how my head works rather than a lovely short answer from a book!

There are probably people out there who can see the answer really quickly - but if like me, you need to really make sure then I'd do the following:

First, fill in all of the information is asks you to - do this in pencil in case you discover it to be FIFO and prefer to split the issues in the usual manner.

Next check if the question asks you to put your answers to more than 2 decimal places - this can often be an indication that AVCO is being used as it produces costs per unit to quite a few decimal places.

Final check for me is I would do a quick little test to see if the first issue on the table calculates as FIFO based on the preceding grand totals (normally the total is a result of a receipt of goods).

As long as you know how to do each of the methods, it should not take you long to check between the 2 methods of FIFO and AVCO - I personally think it is unlikely that LIFO will be used as it is a bit of a defunct method (HMRC don't accept it from businesses in the real world) and none of the past papers (if memory serves me) have ever used LIFO.

See I waffled, but hopefully there may be a small thing in all that rambling that may spark something in your head when you get into the exam - I'll be smiling in mine if I see 'answer to 4 decimal places'

sarahtann

Thank you so much!!! great help :001_smile: