If a company uses the LIFO cost flow assumption on its federal income tax return in order to minimize its tax payment, then it:

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If a company uses LIFO on its tax return, it must also use LIFO on its financial statements to satisfy the consistency principle in accounting. This is because the financial statements are used by investors and creditors to make informed decisions, and using a different cost flow assumption in the financial statements compared to the tax return would distort the company's financial performance and position. Therefore, the company must use the same cost flow assumption for both the tax return and financial statements to avoid any discrepancies.

If a Company Uses the LIFO Cost Flow Assumption on Its