During a period of steadily falling prices,which of the following methods of measuring the cost of goods sold is likely to result in reporting the highest gross profit?
A)Specific identification
B)Average cost
C)LIFO
D)FIFO

Question

Quizplus · Accepted Answer

During a period of steadily falling prices, LIFO (Last-In, First-Out) method of measuring the cost of goods sold is likely to result in reporting the highest gross profit. This is because under LIFO, the most recently purchased goods (which are typically the most expensive) are sold first, resulting in a higher cost of goods sold and, consequently, a higher gross profit.

During a Period of Steadily Falling Prices,which of the Following