Which is a better method, FIFO or LIFO?

FIFO is largely considered the better inventory accounting method. Most accountants and businesses see it as more honest, accurate, and reliable than LIFO. The IRFS doesn't even allow for LIFO as an inventory accounting method, meaning that it can't be used outside the United States.

LIFO, however, is accepted by GAAP and does have certain advantages in terms of its accounting - mostly for tax purposes.