Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. 1.
Question:
1. In each space below, place the correct sign [less than (<), greater than (>), or equal (=)] for each comparison, assuming periods of rising prices.
a. FIFO inventory ____________ LIFO inventory
b. FIFO cost of goods sold ____________ LIFO cost of goods sold
c. FIFO net income ____________ LIFO net income
d. FIFO income tax ____________ LIFO income tax
2. Why would management prefer to use LIFO over FIFO in periods of rising prices?
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Related Book For
Financial And Managerial Accounting
ISBN: 9781337119207
14th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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