What is fifo and lifo

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Accepted Answer

FIFO (First In, First Out) and LIFO (Last In, First Out) are inventory management methods used to track the flow of goods.

FIFO method assumes that the first items purchased or produced are the first ones to be sold or used.
LIFO method assumes that the last items purchased or produced are the first ones to be sold or used.
FIFO is commonly used in industries with perishable goods, while LIFO is used in industries with non-perishable goods.
Example: In FIFO, if you buy 10 units of a product at $5 each and then buy 5 more units at $6 each, the first 10 units will be sold first at $5 each.
Example: In LIFO, using the same scenario as above, the last 5 units bought at $6 each will be sold first.

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