In terms of when inventory accounting is required for tax purposes, you would be incorrect if you said? Question 1 options: The accrual method of accounting must be used with regard to purchases and sales of the inventory items Materials used by contractor to fulfill construction contracts are "merchandise and thus inventory accounting is necessary In order to reflect taxable income correctly, inventories at the beginning and end of each taxable year are necessary in every case in which production, purchase, or sale of merchandise is an income-producing factor. Electricity is merchandise and its delivery is a service