Butler Products Decided in 2016 to Change Inventory Methods to More

question 223

Multiple Choice

Butler Products decided in 2016 to change inventory methods to more effectively report its results of operations.In the past,management has measured its ending inventories by the average-cost method and they now believe that FIFO is a better representation of its profitability. Ignoring income tax,which one of the following journal entries correctly records the change in the accounting principle at January 1,2016?

• A)No journal entry need for prospective application of the change in principle.

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Definitions:

Nitrile

Organic compounds containing the cyano group (-C≡N), noted for their use in the production of rubber, resins, and pharmaceuticals.

Acid Chloride

A class of organic compounds derived from acids by replacing a hydroxyl group (-OH) with a chlorine atom, making them highly reactive.

Aldehydes

Organic compounds characterized by the functional group -CHO, consisting of a carbonyl center connected to an R group and a hydrogen atom.

Amides

Organic compounds containing a carbonyl group (\(C=O\)) linked to a nitrogen atom (\(N\)), important in forming the structure of proteins.