Valuation of issues and valuation of returns

Question

Give a brief introduction of the term valuation of issues and valuation of returns?

Answer 1

Valuation of issues is a complex procedure since the material might be issued out of a variety of lots which may have been purchased at different prices. Following processes are employed for this purpose:

- First-in-First-out (or FIFO)
- Last-in-First-out (or LIFO)
- Average Price Method
- Simple Average Method
- Weighted Average Method
- Uppermost in First out
- Market Price
- Particular Price
- Standard Price

Valuation of returns points to the material returned through the production department to stores department. This valuation is done on two basis:

- At the same price at that issued
- At the present price of issues