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The LIFO Conformity Rule states that if LIFO is used for:

A. One class of inventory, it must be used for all classes of inventory.
B. Tax purposes, it must be used for financial reporting.
C. One company in an affiliated group, it must be used by all companies in an affiliated group.
D. Domestic companies, it must be used by foreign partners.

Respuesta :

Answer: Option (B)

Explanation:

The LIFO conformity rule is referred to as or known as the rule that tends to require, that similar inventory cost flow must be used on all of the financial statements as it is been used on income tax return.  From the following given statement , we can state that LIFO conformity rule provides that LIFO is used for the purposes of tax, it should be utilized for the financial reporting.

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