How to calculate an inventory item using First In, First Out (FIFO) and Last In, First Out (LIFO)—and consider the results of each on the balance sheet.

The main difference among weighted average, FIFO, and LIFO accounting is how each calculates inventory and cost of goods sold. Each system is appropriate for different situations.

FIFO and LIFO are the two most common inventory valuation methods. FIFO stands for “first in, first out” and assumes the first items entered into your inventory are the first ones you sell.

While FIFO refers to first in, first out, LIFO stands for last in, first out. This method is FIFO flipped around, assuming that the last inventory purchased is the first to be sold.

The FIFO and LIFO valuation methods are examples of accounting principles that measure the value of inventory. FIFO and LIFO value inventory very differently, so the same inventory can have ...

Under LIFO your profits are lower compared to FIFO accounting. So where does business strategy come into play? If you feel your inventory costs are likely to remain stable or increase, ...

LIFO, or the practice of answering the most recent emails before older ones, is much more common than FIFO for good reason: Your more recent emails are timely and, depending on how old the past ...

LIFO / FIFO is an accounting method for customers to determine inventory costs. Companies that buy and resell units can the use method to determine when parts came in and when they left, according ...

LIFO assumes you sell your most recently purchased coins first. For example, using the same scenario, if you sell 1 ETH in July for $3,000, LIFO assumes you’re selling the March coin. The ...

FIFO. While LIFO produces a lower tax liability, the FIFO method tends to report a higher net income, which can make the company more attractive to shareholders.