companies have some flexibilty in the methodology they choose to value inventory for...
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Accounting
companies have some flexibilty in the methodology they choose to value inventory for financial reporting purposes as well as tax purposes. The three acceptable methodologies are FIFO or first in first out. The second is LIFO or last in first out ad the third is weighted average costs of inventory. In economic periods of inflation such as the one we are currently experiencing in which their are rising costs and high taxes, which methodology do you believe companies will seek to implement. please provide justification for your response and use of examples to illustrate the reasons why.
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