A new average cost is computed each time a purchase is made in the
A) average-cost method.
B) moving-average cost method.
C) weighted-average cost method.
D) all of these methods.

Question

Quizplus · Accepted Answer

The statement applies only to the moving-average cost method, as it recalculates the average cost every time a new purchase is made, using the most recent inventory transactions to update the average cost. The other methods may also use average costs, but they are not necessarily recalculated with each new purchase.

A New Average Cost Is Computed Each Time a Purchase