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FIFO vs LIFO Accounting: Definitions, Examples, Tax Implications, and Key Differences
Introduction to Inventory Valuation Businesses that handle goods—whether raw materials, parts, or finished products—must decide how to value their inventory. Two of the most widely used methods are FIFO (First-In, First-Out) and LIFO (Last-In, First-Out). These methods don’t track specific physical items but instead provide a systematic way of assigning costs to products sold and…