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First in, first out, or FIFO, is a method businesses use to value inventory in which assets produced or acquired first are sold, used or disposed of first, while the most recently produced or acquired assets are sold, used or disposed of last.

Last in, first out, or LIFO, assumes that assets produced or acquired last are sold, used or disposed of first, while those produced or acquired earlier are sold, used or disposed of last.

 

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