LIFO Method

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LIFO Method, or “Last-In, First-Out,” is an inventory valuation approach where the most recently acquired items are expensed first. This method impacts cost of goods sold and ending inventory values, often resulting in lower taxable income during inflationary periods. Understanding the LIFO meaning in accounting is crucial for financial analysis and tax planning. It contrasts with FIFO, which assumes the oldest inventory is used first.

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