Stockton Ltd

question 55

Multiple Choice

Stockton Ltd. changed its inventory system from FIFO to average cost. What type of accounting change does this represent?

• A) A change in accounting estimate for which the financial statements for the prior periods included for comparative purposes do not need to be restated.
• B) A change in accounting policy for which the financial statements for prior periods included for comparative purposes do not need to be restated.
• C) A change in accounting policy for which the financial statements for prior periods included for comparative purposes should be restated.
• D) A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated.

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Definitions:

Divide Income

The process of distributing a portion of a company's earnings to its shareholders as dividends.

Partnership Net Income

Partnership Net Income is the total earnings made by a partnership, to be divided among its partners according to their agreement.