LIFO → This is a method of pricing inventory that assumes that the last goods purchased are also the first goods sold and therefore the cost of each unit is the last cost recorded
May overstate cost and understate gross profit ) especially when the cost of purchased goods rises over time). Moreover, it may undervalued stocks on hand at the end of the financial period
Products that have a longer expiry date are usually shelved in this manner. Business that are running special promotions on products with may also use this inventory system
