1.A year-to-year analysis of comparative balance sheets and income statements is a useful analysis tool. Still, without proper care, such analysis can be misleading. Discuss factors or conditions that contribute to such a possibility.2.Describe the inventory cost flow assumptions of LIFO, FIFO and Average-Cost. And Discuss managementâ€™s usual reasons for using LIFO in an inflationary economy.3.Would an analyst consider ending inventory asset value more useful if computed using LIFO or FIFO? Would an analyst consider cost of goods sold more useful if computed using LIFO or FIFO? 4.Explain the main reasons why accounting information might deviate from the underlying economic reality. Cite examples of transactions that might give rise to each of the reasons.5. Discuss the inherent limitations of analyzing and interpreting financial statements for a single year.6.How do accounting policies influence financial result of a company? Illustrate with two examples.