Can you help me put the information provided below in a memo:

a. There are fundamental cost - flow assumptions with respect to average cost , FIFO , and the LIFO inventory cost - flow methods . With respect to average cost , this cost - flow assumption represents a more equilibrium between FIFO and FIFO . When this method is used , " each purchase affects both inventory valuation and cost of goods sold . " ( Schroeder , Clark , and Cathey , 2014 ) However , this methodology does not adequately represent market fluctuations . The FIFO cost - flow assumption attempts to mimic the actual flow of goods through an entity . The FIFO inventory cost - flow method also provides an effort to estimate the precise characterization of each inventory unit . Whereas , the LIFO cost - flow assumption presumes that the expenses incurred during the current period should also be matched with the sales of the current period . Thus , the LIFO inventory cost - flow method references the matching principle as the basis for this methodology .

b. The LIFO cost - flow method is useful during an inflationary economy due to the fact that is matches the most recent inventory expenses with the most recent revenues . With an inflationary economy this would match the largest inventory expenses in the current period thus increasing cost of goods sold . Reductions to cost of goods sold would also decrease net income and this would result in significant tax savings to the organization .

c. When there is evidence that the utility of goods , in their disposal during the ordinary course of business , will be less than cost , the proper accounting treatment would be the LCM ( lower of cost or market ) methodology . The concept under which this treatment is justified is conservatism . " Conservatism holds that when you are in doubt , it is best to choose the accounting alternative that will be least likely to overstate assets or income . " ( Schroeder , Clark , and Cathey , 2014 ) The usage of the LCM accounting treatment demonstrates the concept of conservatism in that , " when the cost of inventory exceeds its expected benefit , a reduction of the inventory to its market value is a better measure of its expected future benefit . " ( Schroeder , Clark , and Cathey , 2014 )