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Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results.
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 inventoryb. FIFO cost of goods sold ____________ LIFO cost of goods soldc. FIFO net income ____________ LIFO net incomed. FIFO income tax ____________ LIFO income tax2. Why would management prefer to use LIFO over FIFO in periods of rising prices?
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