Choose the Statement That Best Describes the Effects of the LIFO

Multiple Choice

Choose the statement that best describes the effects of the LIFO inventory valuation method compared to FIFO or average cost.

A) During periods of falling prices, LIFO gives the highest gross profit and the lowest closing inventory value.
B) During periods of rising prices, LIFO gives the highest gross profit and the lowest closing inventory value.
C) During periods of rising prices, LIFO gives the lowest gross profit and the lowest closing inventory value.
D) None of the above.