Question 1

What is inventory?

Accepted Answer

Inventory is one of the most critical assets an eCommerce company has. Companies lacking inventory will have nothing to sell customers, generating no revenue. In fact, inventory represents the goods and raw materials, including finished products awaiting customer sale.

Question 2

What is FIFO?

Accepted Answer

FIFO is an inventory valuation method implying that products are sold to their manufacturing. That is, retailers sell the oldest products first. Many companies use this method for inventory valuation because it can show the correct flow of goods.

Question 3

What is LIFO?

Accepted Answer

LIFO is an inventory valuation method calculating COGS according to the inventory cost at the end of a specific period. The essence of this method is that no matter whether the item came last, retailers sell it first.

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