FIFO reports higher gross profit and net income than the LIFO method when ​

A) ​prices are increasing
B) ​prices are decreasing
C) ​prices remain stable
D) ​prices are reduced by 50%

FIFO

Stands for First In, First Out, an inventory valuation method where goods purchased or produced first are sold or used first.

Gross profit

The difference between revenue and the cost of goods sold (COGS), representing the profit made before deducting operating expenses.

Net income

The profit of a company after all revenues, costs, and expenses have been subtracted, indicating the actual earnings.