Which One of the Following Statements Regarding Changing Inventory Costing

question 15

Multiple Choice

Which one of the following statements regarding changing inventory costing methods is true?

• A)A change in inventory methods can be justified if the change is made to better match profits with revenue.
• B)Changing inventory costing methods violates consistency.
• C)One place that the reader of an annual report would be able to identify that a company changed inventory costing methods is the statement of stockholders' equity.
• D)Tax advantages are valid justification for changing inventory costing methods.

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Definitions:

Underfilling

Refers to the process or instance of not filling a container or space to its capacity, often used in a manufacturing or packaging context.

Z Statistic

A statistical measure used in hypothesis testing, representing the number of standard deviations a data point is from the mean.

Normal Distribution

A bell-shaped data distribution that is symmetric about the mean, representing a common pattern in which most occurrences take place near the average and fewer occur as you move away.

Two-tailed Test

A hypothesis test where the area of interest is in both tails of the probability distribution, allowing for investigating deviations in two opposite directions.