What is the FIFO principle?

Can you explain what the FIFO principle is?

Sure! FIFO stands for 'First In, First Out.' It's an inventory management method where the oldest stock is sold first.

Why is FIFO important for businesses?

FIFO helps businesses manage inventory effectively, reducing waste and ensuring that products are sold before they expire.

Can you give me an example of how FIFO works in a grocery store?

Absolutely! In a grocery store, the oldest products, like milk or bread, are placed at the front so customers buy them first.

Are there any disadvantages to using FIFO?

Yes, one disadvantage is that it may not always reflect the current market value of inventory, especially in times of inflation.