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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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