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LIFO & FIFO are both accounting terminologies for keeping track of inventory/ stock.
LIFO means Last in first out, and FIFO means first in first out.
FIFO may produce a lower Cost of Goods Sold (COGS) when materials costs are increasing. And lower COGS tends to result in higher gross profits, where Revenue - COGS = Gross Profit
LIFO (when materials costs are increasing) produces higher cost of goods sold, and lower gross profit/ending inventory as you are using the newer stock items more constantly. Some believe that LIFO provides a truer value of your current COGS (or inventory) and conversely undervalues the book cost of your inventory on your balance sheet. (again, assuming materials costs are rising.)
EX
we make some goods in 2 periods, assume we make 10 units in each period.
cost period 1 inventory = $10
cost period 2 inventory = $25
If we sell units 10 units for $40 we get the following:
Under FIFO, we sell the 10 units from period 1 first -- so,
Revenue = $40
COGS = $10 (period 1 inventory)
Profit = $30 (and my inventory left over is the period 2 inventory)
Under LAst in First out,
Revenue is still $40, COGS is period 2 units at $25, so Profit = 40-25 =$15
and my remaining inventory is the older period 1 inventory, with cost of 10.
lifo - Last In First Out
fifo - First In First Out
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What is LIFO method?
what is the difference beyween lifo and fifo
Inventory aging system based on FIFO and LIFO method?
FIFO First in first out LIFO Last in last out
What is the difference between ending inventory using LIFO and ending inventory using FIFO referred to as?
LIFO Reserve
What is fifo lifo?
Lifo Fifo
Why does net income change with the FIFO?
FIFO (first in first out) is a method of account for inventory. With FIFO, if inventory costs are increasing your cost of goods sold will be lower than under the LIFO (last in first out) method. If inventory costs are increasing, FIFO will result in higher net income (lower COGS) than LIFO. If inventory costs are decreasing, FIFO will result in lower net income (higher COGS) than LIFO.
What is LIFO method?
what is the difference beyween lifo and fifo
Does Target use the lifo fifo or average-cost inventory method?
fifo
Inventory aging system based on FIFO and LIFO method?
FIFO First in first out LIFO Last in last out
What is the difference between ending inventory using LIFO and ending inventory using FIFO referred to as?
LIFO Reserve
What is fifo lifo?
Lifo Fifo
What are the new approaches used in cost accounting?
cost of production report lifo method fifo method
Why does net income change with the FIFO?
FIFO (first in first out) is a method of account for inventory. With FIFO, if inventory costs are increasing your cost of goods sold will be lower than under the LIFO (last in first out) method. If inventory costs are increasing, FIFO will result in higher net income (lower COGS) than LIFO. If inventory costs are decreasing, FIFO will result in lower net income (higher COGS) than LIFO.
What stock valuation method is acceptable according to the accounting standard?
they are twoo: FIFO and LIFO
Is Lowe's a lifo or fifo company?
FIFO
Does best buy use FIFO or LIFO?
FIFO motherfoocker
What is difference between stack snd queue?
In stack , the object which is last in will be first out (LIFO), whereas in queue the object which is first in will be first out (FIFO).
Why does LIFO order follows in stack and why does FIFO order follows in queue?
LIFO and stack are synonyms, so are FIFO and queue.
