According to the IRS's LIFO conformity rule,a company that chooses LIFO to report net income to its stockholders may not use LIFO in preparing its tax return.

Question

Quizplus · Accepted Answer

The IRS's LIFO conformity rule requires that if a company chooses LIFO for tax purposes, it must also use LIFO for financial reporting. However, if a company uses LIFO for financial reporting, it may choose a different inventory cost flow assumption (such as FIFO or weighted-average) for tax purposes. Therefore, a company that chooses LIFO to report net income to its stockholders may still use LIFO in preparing its tax return.

According to the IRS's LIFO Conformity Rule,a Company That Chooses