Assuming the government does not eliminate LIFO, what are the ethical implications of a company switching...

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Accounting

Assuming the government does not eliminate LIFO, whatare the ethical implications of a company switching its accountingpolicy from FIFO to LIFO, or the other way—from LIFO to FIFO? Whenand why would a company make this change? Explain your answer anddiscuss the financial statement effects.

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The accounting method of last in first out FIFO assumes that merchandise purchased last is sold first With LIFO method the latest costs are moved to cost of goods sold and then this expense is more demonstrator of current prices These costs are high during inflation thus the resulting gross profit and net income are lower It See Answer

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Assuming the government does not eliminate LIFO, what are the ethical implications of a company switching...

70.2K

Verified Solution

Question

Accounting

Assuming the government does not eliminate LIFO, whatare the ethical implications of a company switching its accountingpolicy from FIFO to LIFO, or the other way—from LIFO to FIFO? Whenand why would a company make this change? Explain your answer anddiscuss the financial statement effects.

Answer & Explanation Solved by verified expert

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