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During 2014, Vanguard, Inc., changed to the LIFO method of accounting for inventory. Suppose that during 2013, Vanguard changed back to the FIFO method and the following year Vanguard switches back to LIFO again. Requirements 1. What would you think of a company's ethics if it changed accounting methods every year? 2. What accounting principle would changing methods every year violate? 3. Who can be harmed when a company changes its accounting methods too often? How?

During 2014, Vanguard, Inc., changed to the LIFO method of accounting for inventory. Suppose that during 2013, Vanguard changed back to the FIFO method and the following year Vanguard switches back to LIFO again. Requirements 1. What would you think of a company's ethics if it changed accounting methods every year? 2. What accounting principle would changing methods every year violate? 3. Who can be harmed when a company changes its accounting methods too often? How?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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During 2014, Vanguard, Ic., changed to the LIFO method of accounting for inventory. Suppose that during 2013, Vanguard changed back to the FIFO method and the following year Vanguard switches back to LIFO again. Requirements 1. What would you think of a company's ethics if it changed accounting methods every year? 2. What accounting principle would changing methods every year violate? 3. Who can be harmed when a company changes its accounting methods too often? How?
Transcribed Image Text:During 2014, Vanguard, Ic., changed to the LIFO method of accounting for inventory. Suppose that during 2013, Vanguard changed back to the FIFO method and the following year Vanguard switches back to LIFO again. Requirements 1. What would you think of a company's ethics if it changed accounting methods every year? 2. What accounting principle would changing methods every year violate? 3. Who can be harmed when a company changes its accounting methods too often? How?
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