Imagine you run a store and buy a bunch of apples at the beginning of the month. Then, you buy some more apples later. FIFO, which stands for First In, First Out, is a way of thinking about which apples you sell first. In FIFO, you assume you sell the apples you bought first, even if the newer ones are sitting right next to them. This is a common way to track the cost of your inventory (the apples) for tax purposes.
