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What is the main advantage of using the weighted average method for inventory va
What is the main advantage of using the weighted average method for inventory valuation?
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What is the main advantage of using the weighted average method for inventory valuation?
Simplicity
Tax benefits
Accuracy
Compliance with GAAP
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The main advantage of the weighted average method is its simplicity in calculating the cost of goods sold and ending inventory.
Questions & Step-by-step Solutions
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Q: What is the main advantage of using the weighted average method for inventory valuation?
Solution:
The main advantage of the weighted average method is its simplicity in calculating the cost of goods sold and ending inventory.
Steps: 4
Show Steps
Step 1: Understand that the weighted average method is a way to calculate the cost of inventory.
Step 2: Know that this method averages the cost of all items in inventory.
Step 3: Realize that it simplifies calculations by using one average cost for all items instead of tracking each item's cost separately.
Step 4: Recognize that this simplicity makes it easier to determine the cost of goods sold and the value of remaining inventory.
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