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Why is the Base Stock Method considered unrealistic for stock valuation?
  • a)
    It does not consider the oldest purchase prices.
  • b)
    It does not reflect actual market prices.
  • c)
    It results in higher clerical work.
  • d)
    It overvalues the cost of materials.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Why is the Base Stock Method considered unrealistic for stock valuatio...
The Base Stock Method is considered unrealistic for stock valuation because it does not reflect actual market prices. This method involves pricing a specified quantity of materials at their original cost as base stock, regardless of the current market conditions, which can lead to inaccurate valuations of materials in stock.
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Why is the Base Stock Method considered unrealistic for stock valuation?a)It does not consider the oldest purchase prices.b)It does not reflect actual market prices.c)It results in higher clerical work.d)It overvalues the cost of materials.Correct answer is option 'B'. Can you explain this answer?
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