CPA Exam Practice Questions | Inventory FIFO LIFO | Intermediate Accounting

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The Last-In, First-Out (LIFO) method assumes that the last unit to arrive in inventory or more recent is sold first.
The First-In, First-Out (FIFO) method assumes that the oldest unit of inventory is the sold first.
LIFO is not realistic for many companies because they would not leave their older inventory sitting idle in stock.
FIFO is the most logical choice since companies typically use their oldest inventory first in the production of their goods.