In What Circumstance Should You Calculate a Weighted Average Instead

question 220

Essay

In what circumstance should you calculate a weighted average instead of a simple average?

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Definitions:

FASB Suggestion

Recommendations or guidance offered by the Financial Accounting Standards Board, which sets accounting principles in the United States.

AICPA

Stands for the American Institute of Certified Public Accountants, a professional organization of Certified Public Accountants in the United States.

Financial Reporting

Compiling and presenting financial information that clarifies an enterprise's monetary state to its executive team, investors, and government officials.

Operating Data

Information related to the day-to-day operations of a business, used to analyze performance and make decisions affecting productivity and profitability.