FIFO

What is FIFO?

First In First Out (FIFO) is an inventory valuation method where goods purchased or produced first are assumed to be sold first. Under FIFO, ending inventory consists of most recently acquired items at their current costs. FIFO generally results in higher profit during inflation as older, cheaper costs are matched with current revenues. In Tally, FIFO can be selected as the cost tracking method for stock items, automatically calculating cost of goods sold.