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    maurocevallos's Avatar
    maurocevallos Posts: 1, Reputation: 1
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    #1

    May 5, 2009, 10:26 AM
    Fifo and Lifo
    How do I solve Fifo and Lifo methods?
    Ginger2345's Avatar
    Ginger2345 Posts: 9, Reputation: 1
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    #2

    May 5, 2009, 02:40 PM

    When trying to solve FIFO problems think about milk sitting in a dairy case. The first things in is the first thing you sell. So you are selling the oldest milk first. Or in accounting terms you are selling the items purchased for the oldest costs first.

    When selling LIFO it is the opposite, the most recent item in is the first to go. So you sell items at your most recent costs first, leaving your inventory to consist of the oldest milk only. (I know its gross, but you must remember that this applies to the COST of the goods only not the actual items themselves)
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