Inventory Valuation


P

Pam Ammond

Help in SBA indicates that FIFO is the method used by SBA, BUT it also says
that you can use weighted average or LIFO. It gives no suggestions on how.
In actuality, from reading the posts here, you can't use LIFO or Weighted
Average. SBA Help needs to be improved.

The MPAN test that I took (thank you for the opportunity to become certified
in SBA :) has a question on this topic. I think the question should be
removed from the test since there really is no right answer based on SBA
Help.

Pam

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A

Allan Martin

Pam Ammond said:
Help in SBA indicates that FIFO is the method used by SBA, BUT it also
says
that you can use weighted average or LIFO. It gives no suggestions on
how.
In actuality, from reading the posts here, you can't use LIFO or Weighted
Average. SBA Help needs to be improved.
You are not reading the help correctly. The help clearly indicates that SBA
uses FIFO but that there are other methods that are commonly used. There is
no mention these other methods are available in SBA. The section on the
other methods is for infomation only.
 
P

Pam Ammond

Respectfully, I disagree. If you are in SBA Help and it says:

"Microsoft Office Small Business Accounting uses the First-In, First-Out
(FIFO) method of costing inventory.
....
The cost of inventory can also be accounted for in the following ways.

Last-In, First-Out (LIFO): This method assumes that newest items are sold
first. The cost of the newest item is assigned to the first item sold, and
the cost of the oldest item is assigned to inventory.
Weighted Average: This method uses an average cost. Item cost is assigned by
dividing the total cost by the number of items."

then I believe it is logical to assume that "can also be accounted for in
the following ways" means that SBA can do it even though internally it uses
FIFO. I expected to find a checkbox or dropdown on reports, or an option in
preferences, to change the method, similar to the cash versus accrual
option.

My opinion is that "The cost of inventory can also be accounted for in the
following ways." needs ", but is not supported by SBA" added to it.

Since FIFO, LIFO, and weighted average can mean a buy/no buy decision when
reviewing SBA before purchasing, I think it should be completely clear.

Pam
 
A

Allan Martin

Pam Ammond said:
Respectfully, I disagree. If you are in SBA Help and it says:

"Microsoft Office Small Business Accounting uses the First-In, First-Out
(FIFO) method of costing inventory.
...
The cost of inventory can also be accounted for in the following ways.

Last-In, First-Out (LIFO): This method assumes that newest items are sold
first. The cost of the newest item is assigned to the first item sold, and
the cost of the oldest item is assigned to inventory.
Weighted Average: This method uses an average cost. Item cost is assigned
by
dividing the total cost by the number of items."

then I believe it is logical to assume that "can also be accounted for in
the following ways" means that SBA can do it even though internally it
uses
FIFO.

Yes Allan can read and I have the same program as you. I hope we can both
agree that we disagree on what is logical. For me the use of SBA "uses" FIFO
makes it clear.



I expected to find a checkbox or dropdown on reports, or an option in
 
P

Pam Ammond

Allan, I do apologize if I offended you in any way. I put the exact verbage
for the benefit of all the other people reading this post.

Yes, I would be happy to agree to disagree :) I understand your point and
just happen to read the paragraph differently than you. Thanks very much for
your interpretation.

Pam
 
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A

Allan Martin

Pam Ammond said:
Allan, I do apologize if I offended you in any way. I put the exact
verbage
for the benefit of all the other people reading this post.

Yes, I would be happy to agree to disagree :) I understand your point
and
just happen to read the paragraph differently than you. Thanks very much
for
your interpretation.

Pam

Pam,

Allan does not get offended.
 
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