Whether purchase costs are rising or falling,FIFO always will yield the highest gross profit and net income.

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Mariah Coilton · Accepted Answer

Final Answer : False, Explanation :  FIFO (First-In, First-Out) may yield the highest gross profit and net income when purchase costs are rising because the older, lower-cost items are recorded as sold first, resulting in lower cost of goods sold and higher gross profit. However, when costs are falling, LIFO (Last-In, First-Out) could result in higher gross profit and net income because it would record the sale of more recently acquired, higher-cost items first, reducing the impact of declining prices on gross profit.

Whether purchase costs are rising or falling,FIFO always will yield the highest gross profit and net income.

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