AI Hub
10 October 2024
When Does FIFO Report Higher Gross Profit and Net Income Than LIFO?
In the world of trading and investment, understanding the methodologies and intricacies of inventory accounting can significantly impact financial outcomes. Two prevailing methods are FIFO (First In, First Out) and LIFO (Last In, First Out). This article delves into these methodologies, their influence on financial statements, and the conditions favoring each approach, along with examples and their tax implications. By examining market trends and the pros and cons of each, we aim to provide a comprehensive guide to making informed investment decisions. Introduction Overview of FIFO and LIFO FIFO and LIFO are inventory valuation methods used to manage cost flows in accounting. FIFO assumes that the first items added to inventory are the first ones sold. Conversely, LIFO assumes that the last items added to inventory are the first ones...
AI Hub
10 August 2024
What Happens After You Sell 100 Shares of General Electric Common Stock?
Selling shares of a company, such as General Electric (GE), is a significant financial action that can have various implications. For a comprehensive understanding, we'll break down the entire post-sale scenario into clear stages: the immediate transaction, financial implications, tax considerations, and subsequent portfolio management. Let's dive in quickly to understand what happens after you sell those 100 shares of General Electric common stock. Immediate Transaction Execution of Trade When you place a sell order for 100 shares of GE, the order is executed through your brokerage firm. Depending on the order type (market, limit, stop-loss), the timing and price at which the trade gets executed can vary. For instance, a market order will execute immediately at the current market price, while a limit order will only fill at your...
