Which of the Following Inventory Valuation Methods, Commonly Used Under

question 30

Multiple Choice

Which of the following inventory valuation methods, commonly used under the U.S. GAAP, is NOT allowed under IAS 2 (Inventories) ?

• A) LIFO
• B) FIFO
• C) Weighted average
• D) Retail inventory method

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Definitions:

Fair Value Option

An accounting choice that allows companies to measure specific financial assets and liabilities at their fair values.

Defective Product Returns

Products that are returned to the manufacturer or seller due to their failure to meet quality or functionality standards.

Sales Returns

are goods returned by customers to the seller for a refund or credit, representing a reversal of sales previously recorded.

Journal Entry

A record in the books of accounts that reflects the details of a financial transaction, including the accounts affected, date, and amounts.