Proponents of the LIFO inventory cost-flow assumption argue that this costing method is superior to the alternatives

Question:

Proponents of the LIFO inventory cost-flow assumption argue that this costing method is superior to the alternatives because it results in better matching of revenue and expense.

Required:
a. Explain why “better matching” occurs with LIFO.
b. What is the impact on the carrying value of inventory in the when LIFO rather than FIFO is used during periods of inflation?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...