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January 5, 2009

What is FIFO?

FIFO is the acronym for First In, First Out. FIFO is a cost flow assumption often used to remove costs from the Inventory account when an item in inventory had been purchased at varying costs.

Under FIFO, the oldest cost of an item in inventory will be removed first when one of those items is sold. This oldest cost will then be reported on the income statement as part of the cost of goods sold. FIFO also means that the more recent costs of an item will remain in the Inventory account and will be reported on the balance sheet.

Learn more about FIFO and LIFO at Inventory & Cost of Goods Sold.

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Comments

5 Responses to “What is FIFO?”

  1. What is FIFO? | Accounting Coach Q&A | crmcourses.com on January 5th, 2009 11:58 am

    [...] What is FIFO? | Accounting Coach Q&A [...]

  2. solomon on February 4th, 2009 12:03 am

    Really good for me to know about these. Thanks alot for that.

  3. Josias on February 4th, 2009 2:05 am

    FIFO is first In first Out

  4. KUNWAR on February 5th, 2009 11:09 pm

    when we receive the money as premium from new partner wejournalise inthe following way :
    Cash A/c Dr.
    To premium A/c
    (being money received from the incoming partner as premium )

    May I know that why we credit the premium, whether the premium is persoal a/c or nominal a/c ?

  5. samim ali on April 26th, 2009 8:55 am

    its very very nice site,,,

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