What kinds of businesses use the LIFO method?

Question

Can you give an example of how it would be used in one of these businesses?

Answer 1

A business that wanted a lower asset because the base inventory would be at historic cost.

Answer 2

Any business can use it. It depends what acounting method they use (fifo, lifo, or average...). Generally if a company wants to show greater earnings on its income statement it is better for a company to use Lifo when there is deflation because the cost of goods sold would be last in first out and therefore would result in a lower cost and a higher profit.