FIFO and LIFO account are methods used in managing inventory and financial matters involving the amount of money a company has tied up within inventory of produced goods, raw material parts, feed or components stock.
The difference between FIFO and LIFO results from the order in which changing unit costs are removed from inventory and become the cost of goods sold.
When the unit cost increases, LIFO will result in a larger cost of goods sold and a smaller ending inventory.
If the costs are stable , there will be little or no difference.
