FIFO stands for?

FIFO stands for?

• A. First-in, First-out or the first inventory purchased is assumed to be the first inventory sold
• B. First In First Out
• C. First-In, First-Out Inventory Rule
• D. Final Inventory, Outgoing

Answer: (A)

FIFO stands for First-In, First-Out, a common inventory cost-flow assumption. It means the oldest items acquired are treated as sold first, so the cost of goods sold reflects earlier purchases and the ending inventory holds the newer items. The best option explicitly states both the acronym and the rule that the first inventory purchased is assumed to be the first inventory sold. The other choices either only spell out the words without linking to the sale order or use nonstandard wording or an unrelated concept.

FIFO stands for First-In, First-Out, a common inventory cost-flow assumption. It means the oldest items acquired are treated as sold first, so the cost of goods sold reflects earlier purchases and the ending inventory holds the newer items. The best option explicitly states both the acronym and the rule that the first inventory purchased is assumed to be the first inventory sold. The other choices either only spell out the words without linking to the sale order or use nonstandard wording or an unrelated concept.