In the LIFO method, what remains in inventory at the end?

In the LIFO (Last In, First Out) inventory valuation method, the principle dictates that the most recently acquired or produced items are assumed to be sold first. Consequently, the items that remain in inventory at the end of the accounting period are, in fact, the oldest items still on hand. This means that the inventory consists of the first items that were produced or acquired, which is why this method is named "Last In, First Out."

This approach has implications for the financial statements, especially in an inflationary environment, as it can lead to lower net income and reduced tax liability since the higher costs of recent inventory items are matched against revenues first. Understanding this method is crucial for accurate financial reporting and inventory management.