last in, first out
- Pertains to an inventory valuation approach where items or stock from the most recent batch are assumed to be sold first, and all requisitions are valued at the cost per item of the most recently stocked lot
- The company uses a last in, first out policy to manage and value its inventory, which helps in maintaining the cash flow.
- The accounting department adopts the principle of last in, first out to determine the cost of goods sold and remaining stock value.
- Due to price fluctuations in raw materials, many industries prefer the last in, first out method for inventory management.