When purchase costs of inventory regularly decline, which method of inventory costing will yield the lowest gross profit and income?
A) FIFO.
B) LIFO.
C) Weighted average.
D) Specific identification.
E) Gross margin.

Question

Quizplus · Accepted Answer

When inventory costs decline, FIFO (First-In, First-Out) results in the oldest, higher-cost inventory being matched against revenue, leading to a lower gross profit and income compared to other methods.

When Purchase Costs of Inventory Regularly Decline, Which Method of Inventory