It is used in the calculation of the cost of inventory items when a product sale is made.
When calculating the inventory costs for an item sold, FIFO uses the costs of the oldest available inventory to calculate the gross profit or loss on a sale.
The value of your Inventory will be found on your Balance Sheet in the Asset section.
Inventory can be finished goods ready for sale, e.g. a bottle of perfume, packaged & ready to ship.
It can also include the materials that will make up your finished goods, e.g., the bottle, the box, the labels, and the fragrance oils.
How you value your inventory will affect your profits and your taxes.
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