Multiple choice

If price of a material is decreasing, then the closing inventory will be maximum in

  1. FIFO method

  2. LIFO method

  3. average price method

  4. weighted average method
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

As goods purchased in the last are issued first in LIFO method, thus it will show the maximum amount for the closing stock. The FIFO method will show the stock at least price, average price and weighted average methods will show in between the least and highest.

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