If, in year 1, a company used LIFO; year 2, FIFO; and in year 3, moving average cost for inventory valuation, which of the following assumptions, constraints, or principles would be violated:
A) cost.
B) time period.
C) matching.
D) consistency.
E) materiality.

Question

Quizplus · Accepted Answer

The consistency principle requires that a company uses the same accounting methods and principles from period to period unless there is a justified reason to change. Switching inventory valuation methods each year without such justification violates this principle.

If, in Year 1, a Company Used LIFO; Year 2