Using LIFO to value inventory one year and using FIFO the next is a violation of which accounting principle?
A)Conservatism
B)Recognition
C)Neutrality
D)Matching
E)Consistency

Question

Quizplus · Accepted Answer

The accounting principle violated in this scenario is consistency. Consistency requires that a company use the same accounting methods and principles from one period to the next. By using LIFO to value inventory one year and FIFO the next, the company is changing their accounting method, which violates the principle of consistency.

Using LIFO to Value Inventory One Year and Using FIFO