Question

If this business switches to use FIFO, the cost of goods sold will decrease and the ending inventory will increase. So the profit will become higher. Because inventory is under the asset, so in the balance sheet, asset will be higher than before. In addition, the current ratio goes up.

Answer 1

If this business switches to use FIFO, the cost of goods sold will decrease; however, the ending inventory will increase. The result would be a higher profit because inventory is under the asset. In the balance sheet asset will be higher than before. In addiction, the current ratio goes up.

(Change the dead words)

Answer 2

thnx!