QS 5-18 Contrasting Inventory costing methods LO A1 Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs. 1. Precisely matches the costs of items with the revenues they generate 2. Yields the lowest net income. 3. Has the lowest tax expense because of reporting the lowest net income. 4. Tends to smooth out the erratic changes in costs. 5. Inventory on the balance sheet approximates its current cost