1. XYZ Company has purchased goods for RO 20,000 from Rahima. The following are possible errors that the accountant may commit:

1. The transaction was not recorded.
2. Were recorded as RO 25,000
3. The transaction was not posted to her account
4. Were posted to her account as R0 2,000
5. Were posted to Rashid s account

You are required to rectify all the above errors separately.

If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of goods sold? Justify and explain three merits of the method selected