A company changes its inventory costing method each period in order to maximise profit.This is a violation of the consistency principle.

Name: A company changes its inventory costing method each period in order to maximise profit.This is a violation of the consistency principle.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The consistency principle requires a company to use the same accounting method for similar transactions from period to period. Changing inventory costing methods each period to maximise profit violates this principle.

A Company Changes Its Inventory Costing Method Each Period in Order