Which of the Following Is a Change in Accounting Principle

question 56

Multiple Choice

Which of the following is a change in accounting principle?

• A)A change in the estimated service life of machinery
• B)A change from FIFO to LIFO
• C)A change from straight-line to double-declining-balance
• D)A change from FIFO to LIFO and a change from straight-line to double-declining- balance

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Definitions:

Expense Accounts

Accounts in the general ledger that are used to record various costs and expenses incurred by a business.

Revenue Accounts

Accounts that track the income a business receives from its various activities, such as sales of products or services.

Loss Accounts

Accounts used to record the loss in value of assets or to represent expenses that reduce net income.

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized or accounted for.