Jerry Clark, CFA, has been hired to review the financial statements of a company by a client who values his knowledge and expertise. The client is considering investing in the company and is concerned that the company is being overly aggressive in its accounting practices. Which of the following company activities would be least likely to increase current period net income（）
A. Due to a recent jump in prices, the company has decided to change its inventory valuation method from FIFO to LIFO.
B. The company capitalizes its advertising costs and amortizes the costs over three years. C. The company routinely books the full value of any new contracts it obtains as revenue when at least 25% of the payment has been received.
参考答案：A
解析：
The switch from FIFO to LIFO during a period of rising prices reduces the value of the company’s inventory and therefore inflates COGS. A higher COGS would produce lower earnings. Choice B would tend to reduce annual expenses and increase earnings. Choice C would clearly increase revenue and net income in a fixed period of time if the practice is followed on a regular basis.