Which of the Following Is (Are) the Proper Time Period(s)

question 50

Multiple Choice

Which of the following is (are) the proper time period(s) to record the effects of a change in accounting estimate?

• A) Current period and prospectively
• B) Current period and retrospectively
• C) Retrospectively only
• D) Current period only

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Definitions:

Ending Inventory

The total value of unsold goods that a company has in stock at the end of an accounting period.

LIFO Method

The Last-In, First-Out (LIFO) Method is an inventory valuation approach where the last items added to inventory are assumed to be the first sold, affecting the cost of goods sold and inventory valuation on financial statements.

Effective Tax Rate

The average percentage of income that a business or individual pays in taxes, calculated by dividing total tax expense by taxable income.

FIFO Method

An inventory valuation method where the first items placed in inventory are the first sold, standing for First-In, First-Out.