A Change in the Method of Inventory Pricing from FIFO

question 13

Multiple Choice

A change in the method of inventory pricing from FIFO to LIFO would be accounted for as a (an) :

• A) Part of discontinued operations
• B) Part of gross profit
• C) Change in accounting principle
• D) Change in estimate.

Assess how pricing decisions can create value for customers and the firm.

Know the difference between various pricing orientations and strategies.

Grasp the relationship between pricing strategies and profit objectives.

Understand the impact of cost (supply and demand costs) on pricing decisions.

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Definitions:

Income Before Taxes

A financial measure indicating the profitability of a company before accounting for income taxes.

Income Tax Rate

The percentage rate at which income is taxed by the government, varying based on income level and other factors.

Loss Carryback

A tax provision allowing companies to apply a net operating loss to previous tax years' profits, resulting in a tax refund.

Income Tax Expense

The total amount of income tax a company reports it owes in a given fiscal period.