When a company changes from any inventory method to LIFO, the change is reported Group of...
When a company changes from any inventory method to LIFO, the change is reported
Group of answer choices
as a change in an accounting estimate.
as an error correction.
prospectively because it is usually impractical to determine the effects of this change on prior years’ net income.
using the retrospective approach.
Homework Answers
Answer is Option D) Using the retrospective approach
A change in inventory valuation is a Change in Accounting principle and hence all prior period reporting should be restated using the retrospective approach. The company should recalculate the profit and loss for all the prior periods and necessary adjustments should be made in Retained earnings as if the new inventory valuation method was applied in earlier years.
Hence the Answer is Option D)
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When a company changes from any inventory method to LIFO, the
change is reported
Group of...
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B&G Incorporated decided to change from the FIFO method of valuing inventory to the weighted average...
B&G Incorporated decided to change from the FIFO method of
valuing inventory to the weighted average method in July 2017. The
cumulative effect on prior years of retrospective application of
the new inventory costing method was determined to be $15,000 net
of $4,000 tax. As prices are decreasing, cost of sales would be
lower and ending inventory higher for the preceding period.
Retained earnings on January 1, 2017 was $241,000.
Here are the choices:
Statement of Retained Earnings (Partial) For...
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Help Save & Exit Sub When reporting a change in accounting principle, the usual approach is...
Help Save & Exit Sub When reporting a change in accounting principle, the usual approach is to report the change Multiple Choice 0 As a cumulative effect included in net income of the period of change Prospectively, in the period of change and future periods affected by the change oooo As a cumulative effect included in net income of the period of change and prospective application in future periods. By retrospective application to previously issued financial statements to report the...
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B&G Incorporated decided to change from the FIFO method of
valuing inventory to the weighted average method in July 2017. The
cumulative effect on prior years of retrospective application of
the new inventory costing method was determined to be $15,000 net
of $4,000 tax. As prices are decreasing, cost of sales would be
lower and ending inventory higher for the preceding period.
Retained earnings on January 1, 2017 was $241,000.
Here are the choices:
Statement of Retained Earnings (Partial) For...
Question 19 (2 points) A change in the method of inventory pricing from FIFO to LIFO would be accounted for as a (an): a) change in estimate b) accounting error c) part of discontinued operations d) change in accounting principle
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