Stock Valuation Reports
In stock valuation reports, stock is valued based on the current market value. This means that if 10 articles are purchased at £20, and then a further 10 are purchased at £40, the stock will be valued at £800, or £40 for each of the 20 articles.
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Sales Reports
In sales reports, the value of stock is based on the value at the time of the sale. This means that if an item was worth £10 last week, but £15 this week, a sales report for last week will value that item at £10.
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VAT
VAT is calculated based on the rates from HM Revenue & Customs (HMRC). For more information, see their website at http://www.hmrc.gov.uk/vat/.
VAT rounding
Due to the nature of computers, you may find that VAT calculations can be a few pennies out of what you expect. This is because computer calculations will involve more than two decimal figures, and these need to be rounded before being displayed to the user. For transactions with more than one item, the addition of VAT for each item occurs before the rounding of the total price, for example:
1.2456783904 + 1.3456789101 = 2.5913573005
This would round to £2.59, though you may have calculated it to be £2.60 based on your own view of rounding to two decimal places.
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