Which of the following is (are) true regarding cost flow assumptions?
A) Manufacturing firms are required to use FIFO.
B) Service firms are required to use LIFO.
C) If a firm uses FIFO for tax purposes, then FIFO must be used for financial reporting purposes.
D) If a firm uses LIFO for tax purposes, then LIFO must be used for financial reporting purposes.
E) All of these.

Question

Quizplus · Accepted Answer

If a firm uses LIFO for tax purposes, it must also use LIFO for financial reporting purposes due to the LIFO conformity rule.

Which of the Following Is (Are) True Regarding Cost Flow