![]() On the downside, the gap between costs and profits is wider (compared to the gap when using the LIFO method, which we’ll explore at a later stage).īusinesses should also be careful not to overstate profits as production costs rise, and those numbers are used in their cost of goods calculation. ![]() Financial statements are harder to manipulate.īy using this accounting method, the company gains a more accurate picture of its business. ![]()
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