passwella.
Menu

JAMB Principles of Accounts 2009 Question 22

Question 22

Stock Valuation

Which of the following methods gives a conservative closing stock value during a period of rising prices?

  1. A.LIFO
  2. B.FIFO
  3. C.Simple average
  4. D.Periodic simple average
Show the answer and explanation

Answer: A (LIFO)

Explanation

LIFO leaves the oldest, cheapest goods in stock, so the closing stock value is lowest when prices rise.