first-in, first-out

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Related to first-in, first-out: last in first out

first-in, first-out (FIFO)

An accounting procedure for identifying the order in which items are used or sold. With FIFO, the oldest remaining items are assumed to have been sold first. During a period of inflation this procedure tends to keep costs low for accounting purposes; it results in higher reported profits and a greater tax liability, however. Compare last-in, first-out.