What is the IRS rule of LIFO conformity?
What is the IRS rule of LIFO conformity?
(A) A company that uses FIFO on their financial statements must use FIFO for tax purposes
(B) A company that uses LIFO for tax purposes must use FIFO on their financial statements
(C) A company that uses LIFO for tax purposes must use LIFO on their financial statements
(D) All companies must use FIFO for tax purposes
Answer (C): A company that uses LIFO for tax purposes must use LIFO on their financial statements
Explanation: The LIFO conformity requires citizens that choose to use LIFO for charge purposes to utilise no technique other than LIFO to find out the pay, benefit, or misfortune with the end goal of a report or explanation to investors, accomplices, or different owners, or to recipients, or for credit purposes.
Also see: Financial Statements MCQs
(A) A company that uses FIFO on their financial statements must use FIFO for tax purposes
(B) A company that uses LIFO for tax purposes must use FIFO on their financial statements
(C) A company that uses LIFO for tax purposes must use LIFO on their financial statements
(D) All companies must use FIFO for tax purposes
Answer (C): A company that uses LIFO for tax purposes must use LIFO on their financial statements
Explanation: The LIFO conformity requires citizens that choose to use LIFO for charge purposes to utilise no technique other than LIFO to find out the pay, benefit, or misfortune with the end goal of a report or explanation to investors, accomplices, or different owners, or to recipients, or for credit purposes.
Also see: Financial Statements MCQs
