Accounting for IGCSE & O level - Final Statements (Section 14 - No. 22)
Which of the following statements is true regarding the selection of inventory valuation methods?
Different valuation methods will affect profits and assets differently.
The same method must be used consistently.
GAAP only allows FIFO and AVCO.
IFRS does not allow LIFO
Paskaidrojums
Different inventory valuation methods impact reported profits and assets. Once chosen, a method should be used consistently to ensure comparability. IFRS does not permit the LIFO valuation.