Multiple choice

A company follows FIFO method of valuation of inventories from year to year basis. What type of accounting concept is the company following by adopting this method?

  1. Materiality

  2. Going concern

  3. Double entry system

  4. Accrual concept

  5. Consistency

Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

The company is following FIFO method of valuation of inventories from year to year basis on compliance with the fundamental accounting assumption of consistency. The correct option is (5).