Last In First Out - What does first out mean?

Q: What does first out mean?

`FIFO` stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact oldest physical object has been tracked and sold. ... In other words, the cost associated with the inventory that was purchased first is the cost expensed first.

Answer

While the term "FIFO" refers to the practice of recording sales of the oldest inventory items first, it does not guarantee that the very first physical item was sold. Put simply, the expense that was incurred first is the one linked to the inventory that was bought first.

Last In First Out - What does first out mean?

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