Advantages of First In First Out Method (FIFO)

[MD. ABDUR ROUF]

The following are the advantages of this method:
(i) This method is easy to operate, provided the prices of materials do not fluctuate frequently.
(ii) It gives such a value of closing stock which is vary near to current market prices since closing inventory is made of
most recently purchased goods.
(iii) It is a realistic method because it takes into account the normal procedure of issuing goods/inventory, i.e. the
materials are issued to production in the order of their receipts.
(iv) As it is based on historical cost, no unrealized profit enters into the financial statements for the period.

[shahanasumi35]

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[shafayet]

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