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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.



FIFO = First in First Out. It is an accounting term which refers to the method of accounting for inventory. Let's say you live in a high inflation time and you have stocked yacht bolts (they last forever) in your warehouse. The bolts you made 10 years ago cost $2 each; the bolts you made last year cost $5. FIFO accounting would have you recognize the $2 bolts first until you had sold all of them out of your warehouse and then you'd start accounting for the cost as $5 each instead of $2.