Which of the Following Must Be Reported on the Income

question 15

Multiple Choice

Which of the following must be reported on the income statement as a cumulative effect of change in accounting principle?

• A)Change from straight-line to double-declining-balance method of computing depreciation
• B)Change from double-declining-balance to straight-line method of computing depreciation
• C)Both A and B
• D)Neither A nor B

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Definitions:

Ending Inventory

The total value of all inventory still available for sale at the end of an accounting period.

Income Statement

An Income Statement is a financial statement that shows a company's revenues and expenses over a specified period, culminating in net profit or loss.

Periodic FIFO

Periodic FIFO (First-In, First-Out) is an inventory costing method used to calculate the cost of goods sold, assuming that the oldest inventory items are sold first.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding new purchases to the beginning inventory and subtracting the cost of goods sold.