last in first out inventory method

last in first out inventory method is a common accounting method used to manage inventory. In this method, the last items received are the first ones to be sold or used in production. This approach assumes that the most recent inventory purchases are used up first, which can be beneficial in certain market conditions, such as when prices are rising. The LIFO method can impact financial reporting and taxes, as it may result in higher costs of goods sold and lower profits during times of inflation.