JAMB Accounting 2020 Objective — Question 19

Question 19 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2020 Objective paper, with the correct answer and a full explanation.

19. LIFO doing inflation will

A. A. Over value stock
B. B. Under value stockCorrect
C. C. Value stock at par
D. D. Have no effect on stock

Explanation

LIFO means last-in-first-out. If goods that come into store last are the first to be issued, the old stock will lose value during a period of inflation, thereby undervaluing stock.

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