Group $1$ True or False:$-$

$1-$Fixed indirect production costs are not required to be treated as inventoriable costs for tax purposes

True

Fales

$2-$Taxpayer purchases ten computers at $$3,000$ each for a total cost of $$30,000,$ per the invoice. Taxpayer does not have an applicable financial statement but does have accounting procedures in place at the beginning of the year to expense amounts paid for property costing less than $$2,500.$ Taxpayer records $$25,000$ as an expense on its books and capitalizes the remaining $$5,000.$ The amounts paid for the computers meets the de minimis safe harbor for tax purposes resulting in no book$/$tax difference in treatment.

True

Fales

$3-$FIFO is an example of a cost flow assumption.

True

Fales

$4-$An exception from the application of $263$A for inventory exists for manufacturers whose annual gross receipts do not exceed $$25$ million.

True

Fales

$5-$Home construction contracts are exempt from the UNICAP rules if the taxpayer has three year average annual gross receipts of $$25$ million or less and the construction period is less than $2$ years.

True

Fales

$6-$Regardless of which rules apply $($e$.$g$.263$A or $471),$ inventoriable costs are not to be taken into account until the economic performance rules of Section $461($h$)$ have been satisfied

True

Fales

$7-$axpayers can avoid the required use of an accrual method for inventory on the sole grounds that they do not have inventories on hand at the beginning and end of the taxable year.

True

Fales