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Which method is not allowed under International Financial Reporting Standards (I

Practice Questions

Q1
Which method is not allowed under International Financial Reporting Standards (IFRS)?
  1. FIFO
  2. LIFO
  3. Weighted Average
  4. Specific Identification

Questions & Step-by-Step Solutions

Which method is not allowed under International Financial Reporting Standards (IFRS)?
  • Step 1: Understand what IFRS stands for - International Financial Reporting Standards.
  • Step 2: Learn that IFRS provides guidelines for how companies should report their financial statements.
  • Step 3: Know that there are different methods for valuing inventory, which is the goods a company has for sale.
  • Step 4: Identify the common inventory valuation methods: FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average.
  • Step 5: Recognize that IFRS does not allow the LIFO method for inventory valuation.
  • Step 6: Understand that IFRS prefers the FIFO and weighted average methods instead.
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