(Q6) :

a. What is the difference between various inventory cost flow assumptions: weighted average, FIFO and LIFO?

b. How would you use the LIFO reserve disclosure to transform LIFO firms to a FIFO basis and improve analytical comparability?

c. Explain how to eliminate realized holding gains from FIFO income?

d. What has research told us about the economic incentives guiding the choice of inventory accounting methods?