Costing Methods

Costing Methods

CustomBooks™ offers two costing methods, Weighted Average (default) and FIFO.

In accounting, Weighted Average costing method  of  inventory   valuation uses a  weighted average  to determine the amount that goes into COGS. The  weighted average  cost  method  divides the cost of goods available for sale by the number of units available for sale.

FIFO , which stands for "first-in, first-out," is an inventory costing method that assumes that the first items placed in inventory are the first sold. Thus, the inventory at the end of a year consists of the goods most recently placed in inventory. 

Please note that changing costing methods may significantly change your financial reporting and may require approval from the IRS before changing.      Please consult with your tax advisor before making any changes.


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