During 2015, Crop-Paper-Scissors, a craft store, changed to the LIFO inventory costing method of accounting for inventory. Suppose that during 2016, Crop-Paper-Scissors switches back to the FIFO inventory costing method and the following year switches back to LIFO again.

Explain the effect of Lifo inventory valuation on inventory and COGS.

Explain the effect of FIFO inventory valuation on inventory and COGS.

What would you think of a company's ethics if it changed accounting methods every year?

What accounting principle would changing methods every year violate?

Who can be harmed when a company changes its accounting methods too often? How?