A Company Has Changed Its Method of Inventory Valuation from an Unacceptable

question 1

Multiple Choice

A company has changed its method of inventory valuation from an unacceptable one to one in conformity with generally accepted accounting principles. The auditor's report on the financial statements of the year of the change should include

• A) no reference to consistency.
• B) a reference to a prior period adjustment in the opinion paragraph.
• C) an explanatory paragraph that justifies the change and explains the impact of the change on reported net income.
• D) an explanatory paragraph explaining the change.

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Definitions:

Collective Bargaining

The negotiation process between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, and other aspects of workers' compensation and rights.

Going on Strike

A form of protest or labor action where employees stop working to press for better working conditions, wages, or benefits from their employers.

Withhold Labor

The act of refusing to work, typically as a form of protest or to secure better working conditions or wages.

8-Hour Day

A labor movement regulation that divides the workday into three parts, advocating eight hours for work, eight hours for recreation, and eight hours for rest.