This exercise tests your understanding of the four inventory methods. List the name of the inventory method that best fits the description. Assume that the cost of inventory is rising.

Results in a cost of ending inventory that is close to the current cost of replacing the inventory FIFO method

Used to account for automobiles, jewelry, and art objects Specific$-$identification method

Generally associated with saving income taxes

Provides a middle$-$ground measure of ending inventory and cost of goods sold Average$-$cost method

Maximizes reported income FIFO method

Enables a company to keep reported income from dropping lower by liquidating older layers of inventory $($assume rising prices$)$ LIFO method

Writes inventory down when its net realizable value drops below its historical cost