Closing inventory may be valued using first-in, first-out (FIFO) or average cost (AVCO).
Which of the following statements is true assuming that prices have fallen throughout the year?
A Closing inventory and profit are higher using FIFO rather than AVCO B Closing inventory and profit are lower using FIFO rather than AVCO C Closing inventory is higher and profit lower using FIFO rather than AVCO D Closing inventory is lower and profit higher using FIFO rather than AVCO
The right option is B, can I get an explaination for this?