Lifo Method at Life

Lifo Method. Under lifo method, inventory is valued at the earliest. The lifo method assumes that the latest goods purchased are to be sold at first.

This method makes use of the first in, last out technique generally used in stacking things. Last in, first out (lifo) is a method used to account for inventory. In other words, it assumes that the merchandise sold to customers or materials issued to factory has come from the most recent purchases.

Practice File to help solve FIFO, LIFO, and Moving Average

Under the lifo method, the earliest costs are assigned to ending inventory, and the costs of the most recent purchases are assigned to the cost of goods sold. This method makes use of the first in, last out technique generally used in stacking things. The lifo method assumes that the most recent products added to a company’s inventory are the first to be sold. The costs paid for those recent products are the ones used in the calculation.