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LIFO is often used by businesses that sell perishable goods, such as food or fuel, or goods that are subject to price fluctuations, such as metals or electronics.

Beginning inventory is the total monetary value of items that are in stock and ready to use or sell at the start of an accounting period. Also called opening inventory, beginning inventory matches the previous accounting period's ending inventory.

Last In, First Out (LIFO) Rather than using the older canned goods, the staff use newer inventory instead. The LIFO costing technique requires the restaurateur to record the original purchase price of inventory when it is used, even if the value goes down over time.

Under LIFO, a business records its newest products and inventory as the first items sold. The opposite method is FIFO, where the oldest inventory is recorded as the first sold. While the business may not be literally selling the newest or oldest inventory, it uses this assumption for cost accounting purposes.

Last In, First Out (LIFO) An example of this is when a restaurant stocks up on canned food but continues to purchase fresh ingredients. Rather than using the older canned goods, the staff use newer inventory instead.

First In, First Out (FIFO) is a system for storing and rotating food. In FIFO, the food that has been in storage longest (?first in?) should be the next food used (?first out?). This method helps restaurants and homes keep their food storage organized and to use food before it goes bad.

The FIFO procedure follows 5 simple steps: Locate products with the soonest best before or use-by dates. Remove items that are past these dates or are damaged. Place items with the soonest dates at the front. Stock new items behind the front stock; those with the latest dates should be at the back.