During a period of declining prices, a company would report a lower gross margin using the LIFO cost flow method than with FIFO.

Name: During a period of declining prices, a company would report a lower gross margin using the LIFO cost flow method than with FIFO.
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Question

Quizplus · Accepted Answer

During a period of declining prices, cost of goods sold will include the lower, most recent prices when LIFO is used, resulting in higher, not lower, gross margin.

During a Period of Declining Prices, a Company Would Report