Which of the Accounting Changes Listed Below Is More Associated

question 23

Multiple Choice

Which of the accounting changes listed below is more associated with financial statements prepared in accordance with U.S. GAAP than with International Financial Reporting Standards (IFRS) ?

• A) Change in estimated useful life of depreciable assets.
• B) Change from the FIFO method of costing inventories to the LIFO method.
• C) Change in depreciation method.
• D) Change in reporting entity.

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Definitions:

Variable Costing

An accounting method that considers only variable costs as product costs and treats fixed costs as period costs to be charged in full against the current period's revenue.

Direct Labor Cost

The expense associated with employees who are directly involved in the production process.

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from its operating income.

Variable Costing

A method of costing that includes only variable production costs (costs that vary with production volume) in the cost of goods sold and excludes fixed manufacturing overhead.