During 2021, Amandas Creations, a craft store, changed to the LIFO inventory costing method of accounting for inventory. Suppose that during 2022, Amandas Creations switches back to the FIFO inventory costing method and in 2023 switches back to LIFO again.

Requirements

1. What would you think of a companys ethics if it changed accounting methods every year?
2. What accounting principle would be changing methods every year violate?
3. Who can be harmed when a company changes its accounting methods too often? How?