BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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LIFO
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FIFO
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Either A or B
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None of the above
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Detailed explanation-1: -What is the FIFO method? FIFO stands for first in, first out, an easy-to-understand inventory valuation method that assumes that goods purchased or produced first are sold first. In theory, this means the oldest inventory gets shipped out to customers before newer inventory.
Detailed explanation-2: -FIFO stands for First In, First Out, this is when the stock that was first in the warehouse should be taken out first and used first. This will help ensure that the least amount of food will pass its expiration date. On the other hand, FEFO stands for First Expired, First Out.
Detailed explanation-3: -The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost. If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.