FIFO and LIFO Storage Techniques

FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) are inventory management methods. FIFO means the oldest stock is sold or used first, ensuring products move through in order of arrival. This helps prevent spoilage and keeps inventory fresh. LIFO, on the other hand, sells or uses the newest stock first, which can be useful for reducing tax liabilities during inflation, as it matches current costs with revenue. Both methods affect inventory valuation and financial statements, with FIFO often providing a more accurate reflection of current market conditions and LIFO potentially lowering taxable income during rising prices.