In periods of declining prices,the FIFO method will result in a larger gross margin than the LIFO method.

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In periods of declining prices, the LIFO method will result in a larger gross margin than the FIFO method. This is because LIFO assumes that the most recently purchased items are sold first, resulting in higher cost of goods sold (COGS) and a lower ending inventory value. This lower inventory value reduces the amount of unrealized gains that would be recognized on the balance sheet, resulting in a larger gross margin. In contrast, FIFO assumes that the oldest items are sold first, resulting in a lower COGS and a higher ending inventory value. This higher inventory value increases the amount of unrealized gains that would be recognized on the balance sheet, resulting in a smaller gross margin.

In Periods of Declining Prices,the FIFO Method Will Result in a Larger