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Even Though the LIFO Cost Flow Assumption Will Reduce Taxable

question 68

Essay

Even though the LIFO cost flow assumption will reduce taxable income and the related cash outflow for income taxes, there are certain difficulties encountered with its implementation. Dollar-value LIFO is often used to help overcome these difficulties.
Required:
Discuss three different ways that the dollar-value LIFO method overcomes some of the difficulties in the application of the LIFO approach.


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