advantages of fifo and lifo

advantages of fifo and lifo Advantages of FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) inventory methods depend on business goals and market conditions. FIFO offers better accuracy for businesses dealing with perishable goods, as it ensures older inventory is sold first, reducing waste. It also results in lower cost of goods sold (COGS) during inflation, leading to higher profits. LIFO, on the other hand, helps businesses minimize tax liabilities in inflationary environments by matching current costs with current sales. Both methods have their advantages depending on the specific needs of the business.