FIFO (First-in, First-Out)
FIFO is an inventory valuation method where the oldest inventory costs are recorded as sold first. FIFO assumes earlier purchases are used up before newer ones, which can result in lower cost of goods sold (and higher profits) during inflation. It’s commonly used for perishable or time-sensitive products.
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Financial Leverage
The use of borrowed funds to increase the potential return on investment. While leverage can amplify profits, it also magnifies…
Full Disclosure Principle
A key accounting concept that requires all significant information affecting financial statements to be clearly disclosed. This includes pendings lawsuits,…
Forensic Accounting
A specialized field that combines accounting, auditing, and investigative skills to detect fraud, embezzlement, or financial misconduct. Forensic accountants analyse…
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