139. Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventory?

FIFO
LIFO
AVCO or averrage cost
Answer: Option A
✅ The correct answer is A.
FIFO methods of inventory costing produces ending stock cost close to the market value of the inventory. FIFO (First-in, first-out) method is based on the perception that the first inventories purchased are the first ones to be sold. It is a cost flow assumption for most companies. Since the theory perfectly matches to the actual flow of goods, therefore it is considered as the right way to value inventory.

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