FIFO
first in first outOldest costs are matched with first units soldReflect the cost of the latest purchase
LIFO
Last in First OutMost recent costs are matched with first units soldInventories show the cost of earliest purchaseslower inventory value, lower profits
During periods of inflation, profits will be greater if inventory is valued using
FIFO
During periods of inflation, profits will be lower if inventory is valued using
LIFO
Working Capital will stay the same when a cash dividend is
paid