FIFO and LIFO accounting

FIFO and LIFO accounting are methods used in managing inventory and financial matters involving the amount of money a company has to have tied up within inventory of produced goods, raw materials, parts, components, or feedstocks. They are used to manage assumptions of costs related to inventory, stock repurchases (if purchased at different prices), and various other accounting purposes. The following equation is useful when determining inventory costing methods:

${\displaystyle {\text{Beginning Inventory Balance}}+{\text{Purchased (or Manufactured) Inventory}}=}$

${\displaystyle {\text{Inventory Sold}}+{\text{Ending Inventory Balance}}}$

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Selected accounts Assets Cash Cost of goods sold Depreciation / Amortization (business) Equity Expenses Goodwill Liabilities Profit Revenue
Accounting standards Generally-accepted principles Generally-accepted auditing standards Convergence International Financial Reporting Standards International Standards on Auditing Management Accounting Principles
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