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Under IFRS, which inventory cost-flow assumptions are permitted for valuing inventory?
ALIFO and weighted average only
BFIFO and weighted average only
CFIFO and LIFO only
DLIFO and specific cost only
Answer & Solution
Correct answer: B. FIFO and weighted average only
1. IFRS permits the first-in, first-out (FIFO) and weighted average cost formulas.
2. IFRS prohibits the last-in, first-out (LIFO) method.
3. Therefore the permitted pair is FIFO and weighted average.
4. Rule out any option containing LIFO, since LIFO is not allowed under IFRS.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §4.1 "Inventory", p.113_
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