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Basic Question 10 of 10
Under the ______ method, inventory write-downs are less likely to occur than under other inventory methods (assuming a long-term environment of rising inventory costs).
B. FIFO
C. Weighted average
A. LIFO
B. FIFO
C. Weighted average
User Contributed Comments 2
| User | Comment |
|---|---|
| quanttrader | left with old (first in) inventory which will be less likely to be written down. |
| Antoinepo | This comes from the assumption that price rise constantly, that's why LIFO make a ''cheaper'' inventory lowering the risks of a write-off |
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Andrea Schildbach
Learning Outcome Statements
describe the presentation and disclosures relating to inventories and explain issues that analysts should consider when examining a company's inventory disclosures and other sources of information
CFA® 2025 Level I Curriculum, Volume 2, Module 6.