Which of the following inventory costing methods yields the highest gross profit when costs are rising during the accounting period?

Question

Quizplus · Accepted Answer

First-In, First-Out (FIFO) assumes that the oldest inventory items are sold first, and the newest items remain in inventory. When costs are rising, FIFO results in higher inventory costs and lower cost of goods sold, leading to higher gross profits. This is because the older, lower-cost inventory items are being sold first, leaving the more expensive inventory items to remain in inventory.

Which of the Following Inventory Costing Methods Yields the Highest