Why Does LIFO Have a Lower Gross Profit Than FIFO?

Answer The accounting treatment of inventory can make a huge difference to a company's bottom line. In an environment of increasing or decreasing prices, LIFO and FIFO valuation produces different valuati... Read More »

Top Q&A For: Why Does LIFO Have a Lower Gross Profit Than FIFO

Which Is Better on an Income Statement: LIFO or FIFO?

Inventory valuation provides a method for selling certain inventory items first in accounting terms. These methods transfer inventory costs to the cost of goods sold based on when the company produ... Read More »

How to Calculate Gross Profit for Loss of Profit Insurance?

Many businesses purchase loss-of-profit insurance, also called “business interruption” insurance, to cover a loss of ability to operate due to circumstances outside of the business’s control,... Read More »

Why Is Economic Profit a Better Measure of Profit Than Accounting Profit?

Although rarely acknowledged, you can measure profit in more than one way. Sometimes numbers can deceive you, and this is the case when it comes to accounting profit, which merely shows profit on t... Read More »

What is gross profit and net profit?

Gross profit represents the excess of your sales or revenue over the cost you incurred to make or manufacture products and services. Your net profit represents all income remaining after all expens... Read More »