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LIFO vs. FIFOACC 205 Week 3 DQLIFO vs. FIFO
LIFO vs. FIFOFifo and LifoFIFO and LIFOAccounting Implications of Valuing Inventory under FIFO and LIFOLIFO and FIFO Inventory Accounting MethodsThe two most common methods of inventory accounting are Last-in-first-out (LIFO), and first-in –first out (FIFO), choosing the correct method ofinventory accounting could be detrimental to the income statement andthe statement of cash flow, and also it would affect the balance sheet ofthe company. For a company, it is imperative that they track theirinventories and cost of goods sold. Both of these methods of accountingare a way they could do this. LIFO and FIFO are methods used foraccounting for the inventory. I will discuss these two different methods.FIFOFIFO is a method that companies use whose inventories are like food oran item that could turn bad if not sold quickly. A company using FIFO