FIFO method explained with detailed illustrative exampleABC Co. Ltd sells leather jackets. Due to the seasonal nature of the business, ABC Co sells its merchandise as soon as possible to avoid the risk of downward fluctuation in prices towards the end of the winter season. Which of the following methods is most suitable for the valuation of ABC Co’s inventories? Representation of a FIFO queue In computing and in systems theory, first in, first out (the first in is the first out), acronymized as FIFO, is a method for organizing the manipulation of a data structure (often, specifically a data buffer) where the oldest (first) entry, or "head" of the queue, is processed first. Such processing is analogous to servicing people in a queue area on a first-come, first-served (FCFS) basis, i.e. in the same sequence in which they arrive at the queue's tail ... FIFO Principle stands for “First In, First Out,” meaning that the first item that was stored in a warehouse or store will be the first item to be sold or used. This method is commonly used in inventory management to minimize the usage risk of outdated products and reduce waste. The FIFO method is the first in, first out way of dealing with and assigning value to inventory. It is simple—the products or assets that were produced or acquired first are sold or used first ...
