FIFO vs LIFO Net Income

This tests a core accounting concept that interviewers use to see whether you understand how inventory flows through the financial statements. You need to know how FIFO and LIFO assign purchase costs to sales, how that changes reported cost of goods sold, and why the income statement outcome depends on whether inventory prices are rising or falling. It matters in banking interviews because inventory methods affect net income, margins, taxes, and comparability across companies, so candidates are expected to explain the accounting logic clearly rather than just memorize definitions.