04-10-2009, 09:00 PM
Hello
Im trying to build a stock card (perpetual inventory system) on MS Excel. So I need to ask something. I understand the perpetual inventory system (weighted average cost method).
I this method we record the purchases by entering the quantity of units purchased and its unit cost, by this we get the total cost of purchases.
The balance in hand updates itself by adding the quantity purchased and total cost purchased to the balances in hand. Therefore average cost is calculated by dividing the total purchases in hand by total quantity in hand.
Same way with Sales. In sales I enter the units sold and for unit cost I use the average unit cost that is prevailing at that time. Now the balance in hand will update itself. Sale causes quantity and total cost of units to decrease but the unit price remains unchanged.
Now how to record purchase returns or sales returns ? What should be the unit cost of returns in both cases (Sales / Purchases) and should the average unit cost of the Balance in Hand change ?
Im trying to build a stock card (perpetual inventory system) on MS Excel. So I need to ask something. I understand the perpetual inventory system (weighted average cost method).
I this method we record the purchases by entering the quantity of units purchased and its unit cost, by this we get the total cost of purchases.
The balance in hand updates itself by adding the quantity purchased and total cost purchased to the balances in hand. Therefore average cost is calculated by dividing the total purchases in hand by total quantity in hand.
Same way with Sales. In sales I enter the units sold and for unit cost I use the average unit cost that is prevailing at that time. Now the balance in hand will update itself. Sale causes quantity and total cost of units to decrease but the unit price remains unchanged.
Now how to record purchase returns or sales returns ? What should be the unit cost of returns in both cases (Sales / Purchases) and should the average unit cost of the Balance in Hand change ?
