When an Inventory Costing Formula Is Changed, the Change Is

question 5

Multiple Choice

When an inventory costing formula is changed, the change is required to be applied:

• A) prospectively and the adjustment taken through the current profit or loss;
• B) retrospectively and the adjustment taken through the opening balance of retained earnings;
• C) prospectively and the current period adjustment recognised directly in equity;
• D) retrospectively and the adjustment recognised as an extraordinary gain or loss.

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Definitions:

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product.

Trade Secret

Information that is not known to the public, confers a business advantage over competitors, and is subject to reasonable steps to keep it confidential.

Patent

A legal right granted by the government to an inventor, giving them the exclusive right to make, use, and sell their invention for a certain period of time.

Special Damages

Damages that are specific and quantifiable losses suffered by a plaintiff, typically economic losses such as lost earnings or medical bills.