Difference between single and multiple-step income statement

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Question 1 - Why does a company not just specifically identify the units of inventory sold? Cost flow assumptions are often used -- describe the cost flow from inventory to cost of goods sold for the following methods FIFO and LIFO. If costs are dropping, will the LIFO or FIFO method of inventory valuation yield the lower cost of goods sold? Why?

Question 2 - What is the difference between the single-step and multiple-step income statement formats? Explain how a business can earn a positive gross profit on its sales and still have a net loss.

Reference no: EM133127316

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