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Question
LIFO inventory method was used in year I, FIFO in year II and weighed average in year III. Which accounting principle is violated?
LIFO inventory method was used in year I, FIFO in year II and weighed average in year III. Which accounting principle is violated?
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Solution
The correct option is B Consistency
LIFO inventory method was used in year I, FIFO in year II and weighed average in year III. The accounting principle violated is consistency principle.According to consistency principle, the company should use same accounting treatment for similar events or transactions. It facilitates better comparison and understanding.
LIFO inventory method was used in year I, FIFO in year II and weighed average in year III. The accounting principle violated is consistency principle.
According to consistency principle, the company should use same accounting treatment for similar events or transactions. It facilitates better comparison and understanding.
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