First in first out: Inventory accounting system in which items purchased earliest are the first to be used to determine ending inventory and the cost of goods sold

  • Costs are similar to the physical flow of inventory
  • Results in higher net income in a period of rising prices when compared to the LIFO method
  • Inventory value is overstated in period of rising prices
  • Acceptable method under both GAAP & IFRS

K_5F_FIFO_Inventory

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