The FIFO method separates work done on beginning inventory in the previous period from work done on it in the current period.

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The FIFO method (First-In, First-Out) assumes that the first items purchased or produced are the first items sold or used. This means that the method separates work done on beginning inventory in the previous period (i.e. the items left over from the previous period) from work done on it in the current period (i.e. any items produced or purchased in the current period).

The FIFO Method Separates Work Done on Beginning Inventory in the Previous