Understanding Inventory Valuation Methods

The value of inventory is maintained in the accounting system by one or more inventory general ledger accounts. Accountants and auditors may verify this value against the Inventory Valuation report in OfficeMate.

The Inventory Valuation report calculates the total inventory value, for one or all locations, by multiplying the quantity on hand by the valuation cost for each product and adding the sum total. The Inventory Valuation report may be run for one or more financial groups. The value of individual products depends on the valuation method (or costing method) as prescribed by company policy and specified in the G/L Setup tab of the General Ledger Setup window. Two inventory valuation methods are supported in OfficeMate:

• Standard Costing
• Average Costing

Additional valuation methods may be added in future versions of OfficeMate.