FIFO (First In First Out)
Definition
An inventory valuation method that assumes the goods purchased or manufactured first are sold or used first. As a result, closing stock is valued at the most recent (latest) purchase prices.
Example
"If 100 units at ₹10 are bought first and then 100 units at ₹12, under FIFO the first 100 units sold are costed at ₹10 each, and closing stock is valued at ₹12."