FIFO and LIFO Methods are
accounting techniques used in managing inventory and financial matters
involving the amount of money a company has tied up within inventory of
produced goods, raw materials, parts, components, or feed stocks. These methods
are used to manage assumptions of cost flows related to inventory, stock
repurchases (if purchased at different prices), and various other accounting
purposes.
FIFO stands for first-in, first-out, meaning
that the oldest inventory items are recorded as sold first but do not
necessarily mean that the exact oldest physical object has been tracked and
sold.
LIFO stands for last-in, first-out, meaning
that the most recently produced items are recorded as sold first.
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