Which of the Following Statements Is Correct When Inventory Unit

Multiple Choice

Which of the following statements is correct when inventory unit costs are decreasing?

A) Inventory turnover will be the greatest when the average cost inventory method is used.
B) FIFO's gross profit will be the highest among the inventory costing methods.
C) Inventory turnover will be the largest when the LIFO inventory method is used.
D) Use of the LIFO method will result in higher cash flows due to a decreased cost of goods solD.LIFO has the lowest cost of goods sold, the highest gross profit and taxable income.LIFO will therefore result in a higher tax burden and lower cash flows.