Identify all false statements about LIFO. LIFO has higher recordkeeping costs because a...
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Accounting
Identify all false statements about LIFO.
- LIFO has higher recordkeeping costs because a firm has to keep many layers of inventory over many years.
- Using LIFO for product pricing can make a firm more competitive due to its income tax saving.
- LIFO ending inventory is understated resulting in distorted ratios, particularly inventory turnover.
- Managers will get a higher bonus if the firm uses LIFO instead of FIFO.
- LIFO cost of goods sold under perpetual system can be manipulated downward by substantial year-end purchases.
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