NECO Book Keeping 2015 Objective — Question 1
Question 1 of 40 from the National Examinations Council (NECO) Book Keeping 2015 Objective paper, with the correct answer and a full explanation.
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A distinguishing feature of the FIFO method of stock valuation is that
- A. closing stock is valued at current price
- B. profit is overstated during inflation
- C. it is easy to understand and operateCorrect
- D. it is realistic
Explanation
The First-In-First-Out (FIFO) method's key distinguishing feature is its simplicity and ease of operation. It follows the logical flow of inventory where the first items purchased are assumed to be the first ones sold.
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