Under FIFO, the oldest cost of an item in inventory will be removed first when one of those items is sold. This oldest cost will then be reported on the income statement as part of the cost of goods sold. FIFO also means that the more recent costs of an item will remain in the Inventory account and will be reported on the balance sheet.
What is FIFO?
- Why does LIFO usually produce a lower gross profit than FIFO?
- FIFO and LIFO is best with which type of products?
- How can I determine the difference in earnings from using LIFO instead of FIFO?
- What are cost flow assumptions?
- What is the difference between FIFO and LIFO?
- What are the disclosures for a manufacturer's inventory?
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