The first-in first-out inventory costing method

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In 2002, Roses Exotic Seed Shop, a flower store, changed to the last-In first-out (LIFO) inventory costing method of accounting for inventory. Suppose that during 2003, Roses's Exotic Seeds Shop switches back to the first-in first-out (FIFO) inventory costing method, and again switches in 2004 back to the last-in first-out method (LIFO). What would most people think about the company's ethics if they switch accounting methods every year? What is the accounting principle that would be violated by changing methods every year? Who gets harmed when a company switches its accounting methods too often? How do they get harmed?

Reference no: EM13906966

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