How Would a Company Report a Change in an Accounting

question 7

Multiple Choice

How would a company report a change in an accounting principle made on the last day of the third quarter?

• A)Retrospective application to all pre-change interim periods reported.
• B)No change is required.
• C)Apply to current and prospective interim periods only.
• D)Apply to prospective interim periods only.

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Definitions:

Carrying Cost

The total cost of holding inventory, including storage, insurance, and taxes, over a certain period.

Average Inventory Levels

The mean stock of goods held by a company over a certain period, used to manage inventory efficiently and minimize holding costs.

Materials Requirements Planning

A production planning and inventory control system used to manage manufacturing processes by determining material requirements.

Derived Demand

Demand for a commodity, service, etc., that is a consequence of the demand for something else; for instance, the demand for steel is derived from the demand for automobiles.