Most methods of pricing inventories are in accord with generally accepted accounting principles and generally are permissible for income tax purposes. The method that must be used for financial reporting purposes if used for tax purposes is
A) moving average.
B) weighted average.
C) LIFO.
D) FIFO.

Question

Quizplus · Accepted Answer

The LIFO (Last In, First Out) method must be used for financial reporting purposes if it is used for tax purposes, due to the LIFO conformity rule. This rule requires that if a company uses LIFO to measure taxable income, it must also use LIFO for financial reporting.

Most Methods of Pricing Inventories Are in Accord with Generally