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Explain how the choice of one of the following accounting methods over the other raises or...

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Accounting

Explain how the choice of one of the following accountingmethods over the other raises or lowers a company’s net incomeduring a period of continuing in?ation.

a. Use of FIFO instead of LIFO for inventory costing.

b. Use of a 6-year life for machinery instead of a 9-yearlife.

c. Use of straight-line depreciation instead ofdeclining-balance depreciation.

Answer & Explanation Solved by verified expert
4.1 Ratings (491 Votes)
Part a Company uses FIFO instead of LIFO for inventory Costing In the period of inflation the prices of latest purchases would be higher than earlier purchases Under FIFO the ending inventory gets valued at LATEST purchases This means that cost of    See Answer
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