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JAMB Principles of Accounts 2012 Question 22

Question 22

Stock Valuation

The LIFO method has an advantage over FIFO in that stocks are valued at

  1. A.previous prices
  2. B.current prices
  3. C.average rates
  4. D.flat rates.
Show the answer and explanation

Answer: B (current prices)

Explanation

Under LIFO the latest prices are charged to production or sales, so cost of sales reflects current prices.