week3 disc 1.docx - FIFO and LIFO are cost layering methods used to value the cost of goods sold and ending inventory FIFO is an abbreviation for\"first

week3 disc 1.docx - FIFO and LIFO are cost layering methods...

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FIFO and LIFO are cost layering methods used to value the cost of goods sold and ending inventory. FIFO is an abbreviation for "first in, first out," and it means that the goods first added to inventory are to be the first goods removed from inventory and sold. LIFO is an abbreviation for "last in, first out," and means that the goods last added to inventory are to be the first goods removed from inventory to be sold. When a person is financially reporting there are no GAAP or IFRS restrictions on the use of FIFO in reporting financial results, that is the best reason to switch to the FIFO method. The IFRS doesn't allow the use of the LIFO method in any instance but, the IRS allows the use of LIFO. The LIFO system has more inventory layers to track, since the oldest layers remain in the system for a very long period, which also

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