Financial Reporting and Analysis Q246

0. Given below is the information of a company that uses the FIFO inventory method:
Opening inventory of 1000 units at $12/unit.
Purchase of 200 units at $12.8/unit
Sale of 600 units at $14/unit/brPurchase of 200 units at $13/unit
Sale of 600 units at $14/unit
If the company used a perpetual system versus a periodic inventory system, the gross margin would most likely be:

Answer
Comment
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Option : C
Explanation : When using the FIFO inventory method the ending inventory, the cost of goods sold and the gross margin, are the same under either the perpetual or periodic methods. The use of a perpetual or periodic system makes a difference under weighted average, and LIFO.

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