When inventory costs are falling, and inventory levels are stable, the LIFO method will generally result in ________.
A) a higher gross profit than under FIFO
B) a lower gross profit than under FIFO
C) a lower inventory value than under FIFO
D) a higher cost of goods sold than under FIFO

Question

Quizplus · Accepted Answer

When inventory costs are falling, the LIFO method will result in older, higher-cost inventory being sold first, leading to a higher gross profit compared to FIFO, which sells newer, lower-cost inventory first.

When Inventory Costs Are Falling, and Inventory Levels Are Stable