Ans. LIFO is the abbreviation of Last in First Out and FIFO is the abbreviation of First in First Out. FIFO which is the first in, first out is the inventory management that seeks to sell the older products first so that the business is less likely to lose the money when the products will expire or become obsolete in the future. LIFO is the last in, first out, here the inventory management applies to all the non-perishable goods and uses the current prices to calculate the cost of goods sold or the COGS.