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Describe the inventory valuation methods FIFO and LIFO. Which items are included in ending inventory under each method?●” FIFO (First-In, First-Out) inventory costing method, the cost of goods sold is based on the oldest purchases—that is, the First In is the First Out of the warehouse (sold). This is illustrated by the Cost of goods sold coming from the first goods purchased. FIFO costing is consistent with the physical movement of inventory (for most companies). That is, under the FIFO method, companies selltheir oldest inventory first.First-In, First-Out (FIFO) Inventory Costing Method (p. 315) Inventory costing method in which the first costs into inventory are the first costs out to cost of goods sold. Ending inventory is based on the costs of the most recent purchases.”● “LIFO is the opposite of FIFO. Under the LIFO (Last-In, First-Out) inventory costing method, ending inventory comes from the oldest costs (first purchases) of the period. The cost of goods sold is based on the most recent purchases (new costs)—that is, the Last In is the First Out of the warehouse (sold). This is illustrated by the Cost of goods sold coming from the last goods in the warehouse