Question

During 2015, Crop- Paper- Scissors, a craft store, changed to the LIFO inventory costing method of accounting for inventory. Suppose that during 2016, Crop-Paper-Scissors switches back to the FIFO inventory costing method and the following year switches back to LIFO again.

Requirements
1. What would you think of a company’s ethics if it changed accounting methods every year?
2. What accounting principle would changing methods every year violate?
3. Who can be harmed when a company changes its accounting methods too ­often? How?



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  • CreatedJanuary 16, 2015
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