For perpetual moving average. How do you do adjustment for mistakes or purchase return.
Lets say:
1-begin inventory = 0
2-1st purchase 10 for 1000. Unit cost is 100
3-2nd purchase 10 for 2000. Unit cost is 200
4-sell 10. Average unit cost is 150
5-purchase return 10 for 1000. Because this is a mistake.
So the cogs recorded for the sales will be wrong once this purchase return is recorded.
What is the correct way to handle this situation?