Question

If a company uses LIFO to measure its taxable income, the IRS requires that LIFO also be used to measure income reported to investors and creditors.This is know as the

Answer 1

LIFO conformity rule

Step-by-step explanation:

LIFO stands for Last in, first out and is a method used to account for inventory that records the most recently produced items as sold first. The description provided in this question is known as the LIFO conformity rule. This is a rule that requires all taxpayers that elect to use LIFO for tax purposes to use LIFO exclusively in order to make sure of the income, profit, or loss for the purpose of a report or statement to shareholders, partners, or other proprietors.