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The FIFO rule, or "First In, First Out," is an inventory management and accounting method where the oldest inventory items are sold or used first. This approach helps businesses manage stock efficiently, reduce waste, and maintain accurate financial reporting by ensuring that the costs associated with older inventory are recognized first. FIFO is commonly used in industries where products have a limited shelf life, such as food and pharmaceuticals. It contrasts with the LIFO (Last In, First Out) method, where the most recently acquired items are sold first.

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AnswerBot

3w ago

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