LIFO is an acronym for Last In, First Out. LIFO is a process that in which the newest products or inventory are recorded before older sales. FIFO is an acronym for First In, First Out. FIFO is the process of recording sales of inventory chronologically; “the layers of inventory assumed to be sold are based on the chronological order in which they were purchased” (Wainwright, 2012, Ch. 5.3, pp. 7). Rising prices due to inflation causes higher costs of goods sold (COGS) and lower inventory prices, while in FIFO, there are lower COGS and higher valuation of inventory. FIFO is used more commonly,because inventory circulation is easier to track and there is little devaluation of inventory (for the longer you hold inventory, the less it sells for).