When a Company Changes from LIFO to Another Inventory Method,the

question 91

Multiple Choice

When a company changes from LIFO to another inventory method,the change is reported

• A)prospectively because it is impractical to determine the effects of this change on prior years' net income.
• B)as an error correction.
• C)as a change in an accounting estimate.
• D)using the retrospective approach.

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Definitions:

Nonstandard Products

Products that are unique or customized, differing from mass-market or standardized offerings.

Creating Budget

The process of planning and allocating financial resources over a specific time period, ensuring funds are available for intended activities.

Controlling Inventory

The practice of overseeing and managing the ordering, storage, and use of components that a company will use in the production of the items it will sell, as well as the managing of quantities of finished products for sale.

Selecting Suppliers

The process of identifying, evaluating, and choosing among prospective vendors who can provide goods or services to the company.