alleryStart learning →What does the FIFO formula assume about the closing inventory?
AIt is valued at replacement cost
BIt is valued at the average price
CIt consists of the most recent purchases
DIt consists of the oldest purchases
Answer & Solution
Correct answer: C. It consists of the most recent purchases
If the first items in are used first, what remains must be the latest purchases or production.
Keep practising Valuation of Inventories (AS 2)
Browse all Valuation of Inventories (AS 2) questions for CA Inter, or explore more Accounting topics.
Related questions
Which cost may be added to inventory cost as an other cost?Which classification covers goods acquired for trading in AS 2?Which items can be grouped for NRV write-down?When may actual output be used to allocate fixed overheads?Under AS 2, what does normal capacity mean?NRV counts later price changes if they do what?How are maintenance supplies and loose tools awaiting use treated?How is software bought for resale classified under AS 2?