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LIFO and FIFO

Can you please help me know this.

What is affect of LIFO and FIFO on Balance sheet, Income statement, and Taxes.

Can someone give me this connection in a simple manner?
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Comments

  • Depends on the particular situation. LIFO means that most recent stock will be sold/used so it also depends if the cost of the stock is rising (usually the case) or falling. So in the case of LIFO, higher sold inventory cost means that compared to FIFO, profits are lower, assets (remaining stock) are lower, and taxes are also lower (because profits are lower).
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