If a Company Uses the LIFO Cost Flow Assumption on Its

Multiple Choice

If a company uses the LIFO cost flow assumption on its federal income tax return in order to minimize its tax payment, then it:

A) must use LIFO on its financial statements.
B) must use FIFO on its financial statements.
C) may use any cost flow assumption permitted by GAAP on its financial statements.
D) must correct the error at the beginning of the next accounting period.