Problem
A. Explain two specific ways in which the balance sheet of a company differs from its income statement.
B. What costs should be included in the cost of an item of inventory?
C. Why the income statement of a firm is described as a financial statement that contains temporary accounts.
D. The difference between FIFO and LIFO methods in determining the monetary value of inventory.
E. Explain factors a firm should consider in selecting a particular inventory valuation method such as FIFO or LIFO.