Define Fifo And Lifo. Explain What Effects That Fifo And Lifo Have On

1.	Define Fifo And Lifo. Explain What Effects That Fifo And Lifo Have On The Balance Sheet During A Period Of Rising Prices And During A Period Of Falling Prices?
Answer» FIFO is the INVENTORY COST flow assumption that TREATS the first goods in as the first goods sold. LIFO is the inventory cost flow assumption that treats the last goods in as the first goods sold. In a period of rising prices, FIFO values inventory at current costs. However, LIFO WOULD value inventory at costs that the company could have incurred YEARS ago. The analyst should take the LIFO cost flow assumption into account and consider adjusting the inventory of a company using LIFO upward to account for inflation. FIFO is the inventory cost flow assumption that treats the first goods in as the first goods sold. LIFO is the inventory cost flow assumption that treats the last goods in as the first goods sold. In a period of rising prices, FIFO values inventory at current costs. However, LIFO would value inventory at costs that the company could have incurred years ago. The analyst should take the LIFO cost flow assumption into account and consider adjusting the inventory of a company using LIFO upward to account for inflation.

Define Fifo And Lifo. Explain What Effects That Fifo And Lifo Have On The Balance Sheet During A Period Of Rising Prices And During A Period Of Falling Prices?

Answer»

FIFO is the INVENTORY COST flow assumption that TREATS the first goods in as the first goods sold. LIFO is the inventory cost flow assumption that treats the last goods in as the first goods sold. In a period of rising prices, FIFO values inventory at current costs. However, LIFO WOULD value inventory at costs that the company could have incurred YEARS ago. The analyst should take the LIFO cost flow assumption into account and consider adjusting the inventory of a company using LIFO upward to account for inflation.

FIFO is the inventory cost flow assumption that treats the first goods in as the first goods sold. LIFO is the inventory cost flow assumption that treats the last goods in as the first goods sold. In a period of rising prices, FIFO values inventory at current costs. However, LIFO would value inventory at costs that the company could have incurred years ago. The analyst should take the LIFO cost flow assumption into account and consider adjusting the inventory of a company using LIFO upward to account for inflation.

Define Fifo And Lifo. Explain What Effects That Fifo And Lifo Have On The Balance Sheet During A Period Of Rising Prices And During A Period Of Falling Prices?

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