An advantage of FIFO method of stock valuation is that
- it serves-as a control during inflation
- it is calculated at the end of the year
- it is progressive in nature
-
its flow of cost is in sequence with the flow of stock.
The correct answer is: D
Explanation
The major advantage of the first in first out(FIFO) method of stock valuation
1. it is very easy to apply
2. no manipulation of income is possible
3. the balance sheet amount for inventory is likely to approximate the current market value
4. its flow of cost is in sequence with the flow of stock. Since the first stock will be considered for sale before other stock. the cost is always in sequence with the flow of stock because it corresponds with the normal physical flow of goods