Which one of the following statements regarding changing inventory costing methods is true?
A) A change in inventory costing methods can be justified if the change is made after the completed financial period.
B) Changing inventory costing methods violates consistency.
C) One place that the reader of an annual report would be able to identify that a company changed inventory costing methods is the statement of stockholders' equity.
D) Tax advantages are valid justification for changing inventory costing methods.

Question

Quizplus · Accepted Answer

The statement that changing inventory costing methods violates consistency is true. Consistency is one of the fundamental principles of accounting and requires that a company use the same accounting methods over time to ensure comparability between financial statements. Changing inventory costing methods would violate this principle.

Which One of the Following Statements Regarding Changing Inventory Costing