A Change in Inventory Reporting from LIFO to FIFO Is

question 31

Multiple Choice

A change in inventory reporting from LIFO to FIFO is:

• A)An extraordinary item.
• B)A discontinued item.
• C)Not allowed once lower of cost or market is applied.
• D)Allowed,if it improves the usefulness of information in the financial statements.
• E)Not reported,as it is considered a change in accounting estimate.

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Definitions:

Consolidated Financial Statements

Financial reports that aggregate the financial position, results of operations, and cash flows of a parent company and its subsidiaries as if the group were a single entity.

Consolidated Balance Sheet

A financial statement showing the aggregated financial position of a parent company and its subsidiaries.

Cash

Physical form of currency such as coins and banknotes, representing the most liquid asset used for transactions.

Acquisition

The process by which a company purchases most or all of another company's shares to gain control of that company.