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:

Economic Profit

The variance between collective earnings and complete expenditures, encompassing both overt and covert costs.

Normal Profit

The minimum amount of profit needed for a company to remain competitive in the market; it equals the total opportunity costs of a firm.

Economic Profits

The surplus or profit earned by a firm or individual after accounting for both explicit and implicit costs.

Purely Competitive Industry

An industry characterized by many small firms producing identical products where no single firm can influence the market price.