LIFO and FIFO are two ways that companies following the generally accepted accounting principles value their inventory. One method may be preferred over the other during inflationary time periods, which results in different profits, even though both methods are legal to use.

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This statement is true. LIFO and FIFO can result in different profits during inflationary time periods, which is why companies may prefer one method over the other. Both methods are legal to use, but they can have different impacts on a company's financial statements.

LIFO and FIFO Are Two Ways That Companies Following the Generally