Identify and explain factors that affect quality of, Accounting Basics

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Identify and explain factors that affect quality of

Question: 1. Identify and explain factors that affect quality of earnings.

2. Explain how the choice of one of the following accounting methods over the other raises or lowers a company's net income during a period of continuing inflation.

(a) Use of FIFO instead of LIFO for inventory costing.

(b) Use of a 6-year life for machinery instead of a 9-year life.

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