The method used for removing costs from the inventory of goods. The cost flow can be different
from the physical flow of goods. For example, in the U.S. the LIFO cost flow can be used even if
the oldest goods are shipped to the buyer.
Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com. Read more about the author.