Which of the following statements about FIFO stock rotation is true?

• A. New deliveries are placed at the front to promote new items.
• B. Stock is rotated alphabetically.
• C. First In, First Out means the oldest stock is sold first.
• D. Stock rotation has no effect on inventory.

Answer: (C)

FIFO stock rotation ensures the oldest items are used before newer ones. This keeps inventory fresh and reduces waste from expired or spoiled stock, which is especially important for perishable goods. It also helps ensure inventory records reflect the true age of stock and supports consistent costing, since older purchases are accounted for first when items are sold.

The other ideas don’t fit FIFO: placing new deliveries at the front would push older stock to the back, defeating the purpose of using oldest stock first; rotating stock alphabetically has nothing to do with age or shelf life; and saying rotation has no effect ignores the impact on spoilage, product quality, and inventory valuation.