In accounting, Inventory Methods are the various ways of calculating and tracking the cost and value of goods or products that a business has in stock. This information is important for a variety of reasons, such as helping to inform purchase decisions and providing financial data necessary for tax filing. The two most popular inventory methods are the First-in, First-out (FIFO) method and Last-in, First-out (LIFO) method. In the FIFO method, the costs associated with the oldest inventory items purchased first are used to calculate the value of inventory on hand. In the LIFO method, the costs associated with the most recent purchases are used to calculate the value of inventory on hand. Both methods use accurate measurements to ensure businesses have an accurate record of their inventory levels.