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Inventory Valuation: FIFO and AVCO
Practice Questions

20 CIE IGCSE Accounting questions on Inventory Valuation: FIFO and AVCO, each with instant feedback and a full examiner-style mark scheme.

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✨ Revision guide includes key terms, worked examples and exam technique for Inventory Valuation: FIFO and AVCO.

Try 2 sample questions on Inventory Valuation: FIFO and AVCO

Question 1 · 1 mark · Difficulty 1/3

Which method of inventory valuation assumes that the first items purchased are the first items sold?

  1. AVCO
  2. FIFO
  3. LIFO
  4. Specific identification
Show answer & explanation
✓ Answer: B — FIFO
Award 1 mark for identifying FIFO (First In, First Out) as the method where the earliest purchased inventory is assumed to be sold first. A is incorrect — AVCO uses a weighted average cost. C is incorrect — LIFO (Last In, First Out) assumes latest purchases are sold first and is not permitted under IAS 2. D is incorrect — specific identification tracks individual items, not a flow assumption.
Question 2 · 1 mark · Difficulty 2/3

During a period of rising prices, which statement correctly compares FIFO and AVCO inventory valuation methods?

  1. FIFO produces a lower closing inventory value than AVCO
  2. FIFO produces a higher cost of sales than AVCO
  3. FIFO produces a higher gross profit than AVCO
  4. FIFO produces the same gross profit as AVCO
Show answer & explanation
✓ Answer: C — FIFO produces a higher gross profit than AVCO
Award 1 mark for understanding that when prices rise, FIFO charges older, lower costs to cost of sales, resulting in higher gross profit and higher closing inventory values. A is incorrect — FIFO produces higher closing inventory. B is incorrect — FIFO produces lower cost of sales. D is incorrect — the methods produce different gross profits when prices change.
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20 questions · 25 min · free

CIE IGCSE Accounting: Inventory Valuation: FIFO and AVCO FAQ

How many CIE IGCSE Accounting questions on Inventory Valuation: FIFO and AVCO are there on Kramizo?
Kramizo currently has 20 exam-board-aligned practice questions on Inventory Valuation: FIFO and AVCO for CIE IGCSE Accounting, with new questions added every week. Each question gives you instant feedback and a full examiner-style mark scheme that tells you exactly what would earn marks on a real CIE paper. The questions span the full difficulty range — from straightforward recall (level 1) right up to multi-step reasoning and evaluation (level 3) — so the bank works for first-pass revision and final exam-week stress testing alike.
Is Kramizo free for CIE IGCSE students preparing for Accounting?
Yes — completely free. Every student gets 45 questions a day on the free plan, with no card required and no trial countdown. That free quota works across every subject and every topic in our bank, so you can mix Inventory Valuation: FIFO and AVCO practice with other Accounting topics or even switch to a totally different CIE subject without paying anything. Kramizo's optional Pro plan removes the daily cap and adds detailed progress analytics, but the free tier is the real product — used by thousands of GCSE, IGCSE and CSEC students.
Are the Inventory Valuation: FIFO and AVCO questions aligned to the official CIE IGCSE Accounting syllabus?
Every question is written against the published CIE IGCSE Accounting specification, including the exact command words (state, describe, explain, calculate, evaluate, etc.), mark allocations, and difficulty tier you'd see on a real CIE paper. Explanations are written in the style of official examiner mark schemes — they tell you what is being awarded marks and why distractors are wrong, not just whether you got it right. The bank is continually refined to match the latest syllabus updates from CIE.
How is Inventory Valuation: FIFO and AVCO typically tested on CIE IGCSE Accounting papers?
Inventory Valuation: FIFO and AVCO appears across multiple question types on real CIE IGCSE Accounting papers — most commonly as multiple-choice questions in the objective section, structured short-answer questions in the main paper, and occasionally as part of an extended response. Kramizo's practice bank reflects that mix: 4-option MCQs, true/false statements, fill-in-the-blank key terms, multi-select questions, and ordering questions. Working through the bank gives you exposure to every question style examiners actually use.

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