CAF-2 · Chapter 7 · Question 12 of 15
Where particular items of stock-in-trade are not readily identifiable, the Income Tax Ordinance allows the use of specific inventory valuation methods. Which of the following methods is NOT permitted for tax purposes?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Last-In-First-Out (LIFO) method
Explanation
A person may account for stock on the First-in-First-out (FIFO) method or the Average-cost method. The Last-In-First-Out (LIFO) method is not permitted under the Income Tax Ordinance, 2001.
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