Under generally accepted accounting principles, a company can choose a cost flow assumption for valuing cost of goods sold that can result in different income measurement. However, it can't frequently change the cost flow assumption adopted in order to measure the highest income possible because of the:

Question

Quizplus · Accepted Answer

The consistency principle requires that a company use the same accounting methods and principles from period to period, preventing frequent changes in cost flow assumptions to manipulate income.

Under Generally Accepted Accounting Principles, a Company Can Choose a Cost