Question

True or False: The LIFO Conformity Rule states that if the LIFO method is used for income tax purposes, it can not be used for financial statement purposes.

Answer 1

FALSE

Step-by-step explanation:

The LIFO conformity rule requires taxpayers that elect to use LIFO for tax purposes to use no method other than LIFO to ascertain the income, profit, or loss for the purpose of a report or statement to shareholders, partners, or other proprietors, or to beneficiaries, or for credit purposes.

Hence the IRS requires that the same method for income tax purpose be used for financial statement purpose