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    Question

    A company follows FIFO method of inventory valuation

    every year. Which accounting principle is being followed?
    A Prudence Correct Answer Incorrect Answer
    B Accrual Correct Answer Incorrect Answer
    C Matching Correct Answer Incorrect Answer
    D Consistency Correct Answer Incorrect Answer

    Solution

    Valuing inventory using same method ensures comparability—this is the consistency principle.

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