Business Studies LIFO FIFO (1 Viewer)

[Elisa Sweet]

Can someone please explain to me how to apply LIFO and FIFO as valuation methods? My teacher isn't teaching this very well and I don't understand it.

 

[nerdasdasd]

LIFO assigns the initial inventory as the cost of goods sold, meaning when inventory costs increase, the manager can report a higher profit on its financial statements. Under LIFO the later goods/inventory is assigned to the cost of goods sold, this is is usually used for electronic retailers, and maybe be used by corporations to reduce the amount of tax they pay on profits.

 

[Elisa Sweet]

Thankyou