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

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

a. FIFO inventory	__________	LIFO inventory
b. FIFO cost of goods sold	__________	LIFO cost of goods sold
c. FIFO net income	__________	LIFO net income
d. FIFO income tax	__________	LIFO income tax

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