CFA Practice Question

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CFA Practice Question

Which inventory accounting method usually gives a valuation of inventory that is closest to its economic value?

C. Average cost method
Correct Answer: A

Since FIFO leaves the most recently purchased goods in inventory, the valuation will usually be the closest to current values.

User Contributed Comments 2

User Comment
vatsal92 You have to assume that inventory here means closing stock.
Inaganti6 @vatsal92 good observation.
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