A company should NOT change the inventory costing method each period in order to maximize net income.This is an example of the disclosure principle.

Question

Quizplus · Accepted Answer

This statement is incorrect. A company should not change the inventory costing method each period in order to manipulate net income, as this violates the consistency principle. The disclosure principle requires that any changes in accounting policies or methods be clearly disclosed in the financial statements.

A Company Should NOT Change the Inventory Costing Method Each