Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results.

a. In each space that follows, place the correct sign [less than (<), greater than (>), or equal (=)] for each comparison, assuming periods of rising prices.

1. FIFO inventory                                 LIFO inventory
2. FIFO cost of goods sold                   LIFO cost of goods sold
3. FIFO net income                              LIFO net income
4. FIFO income taxes                          LIFO income taxes

b. Why would management prefer to use LIFO over FIFO in periods of rising prices?