BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -What is the FIFO method? FIFO stands for first in, first out, an easy-to-understand inventory valuation method that assumes that goods purchased or produced first are sold first. In theory, this means the oldest inventory gets shipped out to customers before newer inventory.

Detailed explanation-2: -FIFO stands for “First In, First Out” and is an inventory accounting method used to track the cost of goods sold. This method assumes that the first items purchased (or produced) are the first items sold and that the cost of those items is the cost of goods sold.

Detailed explanation-3: -The FIFO procedure follows 5 simple steps: Remove items that are past these dates or are damaged. Place items with the soonest dates at the front. Stock new items behind the front stock; those with the latest dates should be at the back. Use/sell stock at the front first.

Detailed explanation-4: -First In, First Out, commonly known as FIFO, is an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first. For tax purposes, FIFO assumes that assets with the oldest costs are included in the income statement’s cost of goods sold (COGS).

Detailed explanation-5: -LIFO, also known as “last in, first out, ” assumes the most recent items entered into your inventory will be the ones to sell first.