Question

LIFO inventory method was used in year I, FIFO in year II and weighted average in year III. Which accounting principle is violated?

• A. Cost principle
• B. Consistency
• C. Materiality
• D. No principle of accounting is violated

Answer 1

The correct option is B Consistency

Consistency is a basic assumption on which it is assumed that various policies or methods adopted by the firms while preparing the accounts are consistent from one period to another. Hence, changing of the method is a violation of the consistency concept.