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Unformatted text preview: higher net income and higher taxes because specific identification exactly matches the cost of items with the revenues they generate. In a period of rising prices, LIFO produces a smaller cash outflow for the payment of tax, because a smaller amount of income tax would be paid on a smaller amount of income. E. The replacement costs drops below the ending inventory amount because the LCM recognizes unrealized decreases in the value of inventory, but not increases....
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This note was uploaded on 07/06/2011 for the course ACCOUNTING 101 taught by Professor Ling during the Summer '11 term at SPSU.
- Summer '11