Which of the Following Accounting Changes Requires the Restatement of Financial

question 52

Multiple Choice

Which of the following accounting changes requires the restatement of financial statements presented for prior years?

• A) A change in depreciation method from the straight-line method to the double-declining-balance method
• B) A change from the LIFO to the FIFO inventory valuation method
• C) A change from the FIFO to the LIFO inventory valuation method
• D) A change in the useful life used in the depreciation calculations for a company's manufacturing equipment

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Definitions:

Expected Costs

Anticipated or forecasted costs for a project, activity, or production based on historical data, current conditions, and future projections.

Total Fixed Cost

The aggregate sum of all expenses within a company that remain constant regardless of the level of production or sales.

Fixed Cost Per Period

Costs that do not vary with the level of production or sales within a certain range and time frame, such as rent or salaries.

Mixed Cost

A cost that contains both variable and fixed cost elements and changes in total with the level of activity, but not proportionately.