Which of the Following Is a Change in Policy

question 17

Multiple Choice

Which of the following is a change in policy?

• A)Inventory was sold below carrying amount even though the inventory had been previously written down to lower of cost and net realizable value.
• B)A company changes from the cost model to the revaluation model of measuring the value of land.
• C)Development costs were capitalized when only five of six criteria for capitalization had been satisfied.
• D)The company miscalculated the weighted average number of ordinary shares outstanding because it used the wrong date for a share issuance.

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Definitions:

Price Level

A measure that reflects the average prices of goods and services in an economy at a specific point in time.

Marginal Propensity

The tendency of an individual or household to spend an additional dollar of income on consuming goods and services.

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that caused it, illustrating the impact of fiscal policy on total economic output.

Simple Spending Multiplier

A formula used in economics to determine the impact of a change in autonomous spending on the aggregate output, highlighting the amplification of initial spending through the economy.