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When using FIFO or LIFO, either method used the company should conduct a inventory cost on each they can use a real-time perpetual inventory system and update a periodic inventory system (Wainwright, 2012, chap. 5.3, para.1). When using a perpetual system this continues to update inventory when changes are made meaning sales or purchasing. When using the periodic systemthis is also a way to update inventory only through intervals (Wainwright, 2012, chap. 5.3, para. 1). When using either one will go hand and hand with FIFO or LIFO and can make tracking inventory easier, on occasion a physical count performed with either FIFO or LIFO. The acronym for FIFO is “first-in, first-out” this pertains to inventory and how companies use anaverage cost approach. In this approach, companies can value the cost of inventory when they receive it first through their sales. An example on how this is used I will use from our text. Example: “you own a convenience store, you would probably sell milk on a FIFO basis” (Wainwright, 2012, chap. 5.3, para. 4).