First In First Out 

First-In, First-Out (FIFO) Method

First-In, First-Out (FIFO) is one of the methods commonly used to calculate the value of inventory on hand at the end of an accounting period and the cost of goods sold during the period. This method assumes that inventory purchased or manufactured first is sold first and newer inventory remains unsold. Thus cost of older inventory is assigned to cost of goods sold and that of newer inventory is assigned to ending inventory. The actual flow of inventory may not exactly match the first-in, first-out pattern.

First-In, First-Out method can be applied in both the periodic inventory system and the perpetual inventory system. The following example illustrates the calculation of ending inventory and cost of goods sold under FIFO method:

Keep food safety in mind while you go through the cupboards, refrigerator and freezer to dispose of expired foods and clean your shelves. Though most of our shelf food will remain safe past their “best used by” dates, you may still want to cycle out any foods that you are not eating, or have been there a while and have lost their quality. The same is true for your freezer. Foods kept frozen will remain safe, but can lose their quality over time. A great system to help with this is “FIFO.”

FIFO is “first in first out” and simply means you need to label your food with the dates you store them, and put the older foods in front or on top so that you use them first. This system allows you to find your food quicker and use them more efficiently. To ensure using food prior to expiration focus your choices on the FIFO principle by consuming the earliest purchased food items and whose shelf life is the shortest, first.

In the refrigerator, you need to check for any forgotten leftovers. To ensure leftover safety follow these guidelines:

  • Temperatures between 40 degrees Fahrenheit and 140 degrees Fahrenheit allow bacteria to grow rapidly. Refrigerate cooked leftovers promptly – within two hours; or, one hour when the temperatures are over 90 degrees Fahrenheit. Use an appliance thermometer to ensure that your refrigerator is always 40 degrees Fahrenheit or below.

  • Divide leftovers into smaller portions and store in shallow containers in the refrigerator.

FIFO is especially helpful when there are multiple items of the same product. Additionally, adhering to specific storage times of common food items can further aid in maintaining freshness and quality.


You have reach the end of our HACCP level II programme. We advise you to please go over the information to have a full understanding before proceeding to sit exam