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Periodic and perpetual inventory methods can result in a difference in how firms report losses of inventory. Lost inventory would be included in Costs of

Periodic and perpetual inventory methods can result in a difference in how firms report losses of inventory. Lost inventory would be included in Costs of goods sold for periodic firms and other gains or losses for perpetual firms. What characteristic of useful information is most directly affected by this difference in accounting methods?

Comparability

Verifiability

Faithful representation

Understandability

Relevance

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