NO.PZ2019120301000174
问题如下：
Question
Which of the reporting methods will most likely lead to the smallest write-down?
Three companies in the same industry are identical except in how they account for inventory: One uses first-in, first-out (FIFO), another uses last-in, first-out (LIFO), and the third uses weighted average cost. Although the industry experienced increasing prices in prior years, a recent technological breakthrough has substantially reduced the value of the companies’ inventories, and each company will face inventory write-downs.选项：
A. FIFO
B. weighted average cost
C. LIFO
解释：
SolutionC is correct. Given increasing inventory costs in prior years, the inventory carrying amounts under the LIFO method are already presented at the oldest and lowest costs. The magnitude of the write-down under LIFO is likely to be the lowest. Prior to the write-down, inventory under FIFO will be at the highest level and will result in the largest write-down. The write-down for the company using weighted average cost will be in between that of the two other companies.
A is incorrect. The company that uses FIFO will experience the largest write-down because its inventory will be the highest given rising costs.
B is incorrect. The company that uses weighted average will experience a write-down that is in between the companies using LIFO and FIFO.
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