Question

Which inventory method assumes that the earliest goods purchased or produced are the first to be sold?

• A. FIFO (First-In, First-Out)
• B. LIFO (Last-In, First-Out)
• C. AVG (Average Cost)
• D. STD (Standard Cost)

Hint:

FIFO = Old stock first sell. LIFO = New stock first sell.

Answer 1

The Correct Option is A

Step 1: Understanding inventory methods.
Inventory valuation ke liye alag-alag methods use kiye jate hain jaise FIFO, LIFO aur Average Cost. Yeh methods decide karte hain ki kaunsa stock pehle sell hua maana jayega.

Step 2: Concept of FIFO.
FIFO ka full form hai First-In, First-Out. Is method me jo goods sabse pehle purchase ya produce hote hain, unhe sabse pehle sell maana jata hai.

Step 3: Analysis of options.

• (A) FIFO: Correct. Earliest goods first sell hote hain.
  
• (B) LIFO: Latest goods pehle sell hote hain.
  
• (C) AVG: Average cost method use hota hai.
  
• (D) STD: Standard costing method hai.
  

Step 4: Conclusion.
Isliye FIFO method earliest goods ko pehle sell assume karta hai.
Final Answer:} FIFO (First-In, First-Out).