LIFO and FIFO method of inventory is used to calculate the cost of the present inventory and to find out the actual ending inventory. FIFO and LIFO have their own pros and cons. We are comparing both the methods in terms of various issues.
LIFO means last in first out. It is an asset-management and evaluation method that take responsibility to assets produced or acquired last are the ones that are used, sold or disposed of first.
The term LIFO liquidation is associated with the accounting of the inventory of a business. As we know LIFO is a method of managing inventory that stands for Last In First Out. In this method of inventory management last purchased item is sold first.
There are a number of inventory valuation methods that can be used according to the business requirements and managerial decisions. Inventory valuation methods are named as LIFO, FIFO and they have a negative or a positive impact on the financial performance of your
Last In First Out (LIFO) – Materials and Inventory Costing Method: Learning Objectives: Define and explain last in first out (LIFO) method. Give an example of LIFO costing method What are advantages and disadvantages of LIFO method? Definition and explanation of LIFO method Example