Question 1. Discuss why you feel that GAAP allows so many alternative methods for valuing inventories and computing depreciation.
Question 2. Identify the factors that you, as a manager, would consider in chosing among the alternative inventory and depreciation methods allowed by GAAP.
Question 3. Discuss what you feel might happen if all the firme were forced to use the same method. For eg. assume that instead of allowing for several alternative inventory and depreciation methods, GAAP simply required all the firms to use the straight line depreciation method and FIFO inventory method. Do you think that by requiring all the firms to use the same methods, the usefulness of financial statements would be increased or decreased? Explain.