I use 3 different brokers and each one does things slightly different. However, it is true that your account is set up (automatically at first) to record profit/loss accrued in a particular manner and that is the way Uncle Sam will tax you. Most sites have a tutorial or knowledge base, I encourage you to study up on it - it will be very important next year when you do your taxes and could make a big difference in what you pay.
It will also determine the manner in which your shares will be sold, the latest purchased first or the earliest purchased first. Big difference - so get it set appropriately before you sell.
For example: say you purchased 10k of SMKY @ .20 then later 10k of SMKY @ .02 and you want to sell a little to take a profit @ .10. If you are set up FIFO (first in, first out) and you sell 5k @ .10, you are going to "make" $500 on a stock which cost you $1,000. If you are set for LIFO (last in, first out) you will make $500 on 5k worth of stock which cost you $100 - so there is a big difference.
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