Which statement concerning inventory is not true?
A) Consistency is an important consideration when alternative accounting methods exist.
B) Once an inventory costing method is selected management should not deliberately switch to another to manipulate profits.
C) Accounting data produced in different accounting periods is not comparable if arbitrary changes in accounting methods are permitted.
D) Consistency rules out ever switching to an alternative accounting method.

Question

Quizplus · Accepted Answer

The statement "Consistency rules out ever switching to an alternative accounting method" is not true. While consistency is important for comparability, a company may need to switch to a new accounting method for valid reasons such as changes in the nature of the business or new accounting standards. However, any such change should be disclosed and explained in a company's financial statements.

Which Statement Concerning Inventory Is Not True