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Consider 2 hypothetical companies, Firm A and Firm V which are both listed on the stock exchange and hence need to comply with the accounting standards. For internal reporting purposes (i.e., reports that are circulated only amongst employees who work for the particular organisation), Firm A uses absorption costing while Firm V uses variable costing. These two firms produce the same products in equal quantities. Both firms also sell the same quantities of their output, generate the same amount of revenues and incur the same amount of costs. Which of the following statements about Firm A and Firm V is/are likely to be true? 1. In their respective internal financial reports, Firm A would always report a higher value of inventory on the Balance Sheet compared to Firm V. 2. In their respective internal financial reports, Firm A would always report a lower cost of goods sold on the Profit and Loss statement compared to Firm V. 3. In their respective external financial reports (produced for external users such as investors), Firm A would always report a higher value of inventory on the Balance Sheet compared to Firm V. Statement 1 only Statement 2 only Statement 3 only Statement 1 and 3 only Statement 2 and 3 only