A Change from Inventory Costing Using FIFO to Inventory Costing

question 22

True/False

A change from inventory costing using FIFO to inventory costing using Weighted Average is an example of a change in accounting principle.

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Definitions:

Amortization

A financial process used to gradually reduce the cost of a fixed asset over its useful life, affecting intangible assets like patents or licenses.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Long-term Liabilities

Debts or obligations that are not due to be settled within the next 12 months from the balance sheet date.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.