Which of the Following Is a Change in Accounting Principle

question 94

Multiple Choice

Which of the following is a change in accounting principle?

• A) a change in the estimated service life of machinery
• B) a change from FIFO to weighted average for inventory costing
• C) a change in the estimated allowance for bad debts
• D) a change in estimated future warranty expense

Grasp the significance of a firm's cost of capital in evaluating investment projects.

Understand the implications of NPV and IRR for project selection under capital rationing.

Compare projects with unequal lives using appropriate methods.

Appreciate the different approaches to capital budgeting preferred by firms of varied sizes.

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Definitions:

Lost Sale

A situation where a business misses the opportunity to sell a product or service due to stockouts, mismatched pricing, or other sales process failures.

Markdowns

Reductions from the original or retail price of goods, typically used to clear out inventory and stimulate sales.

New Car Models

The latest vehicles introduced by manufacturers that often include updated features, technologies, and designs.

Dealers

Entities that buy products from manufacturers or wholesalers to then sell to consumers or other businesses.