LIFO (last-in, first-out)

is an inventory cost flow whereby the last goods purchased are assumed to be the first goods sold so that the ending inventory consists of the first goods purchased.

LIFO impacts financial results during periods of inflation by increasing cost of goods sold and reducing reported profits.

- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.

- Example: Teams reference **LIFO (last-in, first-out)** when defining terms in manuals, policies, or training materials.

- Why it matters: Improves clarity and consistency across documentation and decision-making.