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Aug 13, 2023 at 05:21 PM

Weighted average cost and vendor balance

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Hello to all,

We bought some goods from a vendor and now we return the goods to the vendor, it was 1 item of $ 2, the entry is

Dr. Inventory $2

Cr. Accounts payable $2

so the accounts payable balance is $ 2

after another transaction the weighted average cost changes shown below:

Quantity Unit price Weighted average

purchase 1 $2 1 * $2

purchase 1 $3 2 * $2.5

return -1 $2.5 1 * $2.5

but when we return the item based on weighted average cost it will be a different price the entry is
Dr. Accounts payable $2.5
Cr. Inventory $2.5
now the accounts payable balance is $ 0.5 debit, while it should be zero, how we treat it?