Accounting · Inventory Valuation
A company changes its inventory valuation method from First-In, First-Out (FIFO) to the weighted average cost method. In a period of steadily rising prices, how does this change affect the current period's income statement?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Higher gross profit and lower income tax
- 2No change in Cost of Goods Sold (COGS)
- 3Lower Cost of Goods Sold (COGS) and higher gross profit
- 4Higher Cost of Goods Sold (COGS) and lower gross profit✓
Correct answer
Higher Cost of Goods Sold (COGS) and lower gross profit
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