BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The Last-In, First-Out (LIFO) method assumes that the last unit to arrive in inventory or more recent is sold first. The First-In, First-Out (FIFO) method assumes that the oldest unit of inventory is the sold first.

Detailed explanation-2: -Last-in, First-out (LIFO) The last-in, first-out method (LIFO) of cost allocation assumes that the last units purchased are the first units sold.

Detailed explanation-3: -The LIFO method considers the most recent items purchased first in terms of the cost of goods sold and allocates older items bought in the ending inventory. You should note that using the LIFO method during inflationary times can result in lower net income values and a decreased ending inventory value.

Detailed explanation-4: -The LIFO method assumes that the most recently purchased inventory items are the ones that are sold first. With this cash flow assumption, the costs of the last items purchased or produced are the first to be counted as COGS. Meanwhile, the cost of the older items not yet sold will be reported as unsold inventory.

Detailed explanation-5: -First In, First Out, commonly known as FIFO, is an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first. For tax purposes, FIFO assumes that assets with the oldest costs are included in the income statement’s cost of goods sold (COGS).