Which of the Following Is Not a Retrospective-Type Accounting Change

question 8

Multiple Choice

Which of the following is not a retrospective-type accounting change?

• A) Completed-contract method to the percentage-of-completion method for long-term construction contracts
• B) LIFO method to the FIFO method for inventory valuation
• C) Sum-of-the-years'-digits method to the straight-line method
• D) "Full cost" method to another method in the extractive industry

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Definitions:

Economic Profit

The difference between total revenue and both explicit and implicit costs; the profit that exceeds the opportunity cost of resources.

Perfectly Competitive Markets

Markets in which no individual buyer or seller has any significant impact on prices and products are perfect substitutes.

Minimum ATC

The lowest point on the Average Total Cost curve, indicating the most efficient scale of production for a firm in the long run.

Economic Profit

Profits earned by a firm or an individual after subtracting both the explicit costs and opportunity costs of resources employed.