What type of stock valuation would a vegetable seller adopt in valuing it’s product?
-
A.
LIFO -
B.
FIFO -
C.
Simple average -
D.
Weighted average
Correct Answer: Option B
Explanation
FIFO is a method of stock valuation that stands for ‘First-In, First-Out’. This assumes that the first (oldest) units of stock produced or received are also the first ones that are sold. This is also suitable for perishable items