QS 5-19 (Algo) Contrasting inventory costing methods LO A1 Identify the inventory costing method (SI, FIFO, LIFO, or WA) best described by each of the following separate statements. Assume a period of increasing costs. 1 2 3 Has the lowest tax expense because of reporting the lowest net income Yields the highest gross profit. Tends to smooth out the erratic changes in costs. Precisely matches the costs of items with the revenues they generate. Cost of goods sold approximates its current cost. 4 LIFO 5. FIFO Specific identification Weighted average