Last In, First Out

With the last in, first out (LIFO) costing method, TireMaster uses the cost of the last item received as the item’s next cost.

For example, if you receive a tire in January at a cost of $50 and a tire in February at a cost of $60, the next cost of the item will be $60—the cost of the tire put in TireMaster last. The next time you sell one of those tires, a $60 cost posts to the general ledger and it is used to calculate the value of the tire.