Which of the following is 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.

Question

Quizplus · Accepted Answer

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

Which of the Following Is True Regarding Cost Flow Assumptions