Which description matches the FIFO inventory method?

• A. Newest items are used first.
• B. Oldest items are used first.
• C. Items are rotated randomly.
• D. Inventory is not tracked.

Answer: (B)

FIFO means using the oldest inventory first. This approach helps prevent spoilage for perishable items common in travel and hospitality, such as food and beverages, because stock with the earliest dates is utilized before newer stock. In accounting terms, FIFO assigns the cost of goods sold from the oldest purchases, leaving the newer costs in ending inventory. The other descriptions don’t fit: using newest items first describes a different method (often called LIFO in accounting), rotating randomly isn’t a formal method, and not tracking inventory isn’t an inventory method at all.