Week 3 Discussion 1 - The controller of Sagehen Enterprises...

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The controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. To determine if it would be logical to change methods, the two methods must first be understood and analyzed to understand how each method impacts different companies. FIFO and LIFO are two of three accounting inventory methods that are used to find out the cost of the ending inventory (K Wainwright, 2012). FIFO and LIFO are inventory-costing methods that determine how much inventory has not been sold, the cost of goods sold, repurchases, and other sorts of transactions that must be reported at the end of an accounting period (K Wainwright, 2012). FIFO is an acronym for First in, First out; which means that goods are sold in the order they were received. In other words, goods that are unsold are the goods that are newer in the inventory. Needless to say, LIFO is an acronym for Last In, First Out; which is the opposite of FIFO. Using the LIFO method means that a company will sell the newer

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