Introduction
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Moving Average formula :
( ( Current Moving Average Cost * Current Balance Quantity ) + ( New Transaction Price * New Transaction Quantity ) ) / ( Current Balance Quantity + New Transaction Quantity )
Moving Average Cost is calculated by company. Thus, the Moving Average Cost for an item will be the same across the entire company.
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| Posting Section | GL Code | Debit | Credit |
|---|---|---|---|
| Current Asset | inventory | 55.2 0 | |
| Cost of Goods Sold | inventoryVariance | 55.20 |
Back-dated Transactions
MA is always current.
If you were to create a back-dated GRN / PR, the MA will be recalculated based on current balance quantity and current MA and it will affect only the future transactions.
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Scenario 1 : back-dated Purchase Return
| Txn Date | Creation Date | Txn | Qty | U.Price | U.Cost | Balance Qty | Balance Value | MA | GP |
| 2015-03-01 | 2015-03-01 | GRN1001 | 200 | 30.00 | 200 | 6,000.00 | 30.00 | ||
| 2015-06-01 | 2015-06-01 | GRN1002 | 200 | 100.00 | 400 | 26,000.00 | 65.00 | ||
| 2015-03-01 | 2015-07-01 | PR1001 (for GRN1001) | 200 | 30.00 | 200 | 20,000.00 | 100.00 | ||
| 2015-08-01 | 2015-08-01 | INV1001 | 200 | 110.00 | 100.00 | 0 | 0.00 | 0.00 | 2,000.00 |
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