The taxpayer must use either the FIFO or LIFO method of valuing inventory, depending upon which method reflects the actual goods the taxpayer has on hand.

Question

Quizplus · Accepted Answer

The taxpayer can choose either the FIFO (First-In, First-Out) or LIFO (Last-In, First-Out) method for valuing inventory based on financial and tax planning strategies, not necessarily on which method reflects the actual goods on hand.

The Taxpayer Must Use Either the FIFO or LIFO Method