When the Retrospective Approach Is Used for a Change to the FIFO

question 7

Multiple Choice

When the retrospective approach is used for a change to the FIFO method, which of the following accounts is usually not adjusted?

• A)Deferred Income Taxes.
• B)Inventory.
• C)Retained Earnings.
• D)All of the above usually are adjusted.

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Definitions:

Appellate Court

A higher court that reviews the decisions of lower courts and may affirm, reverse, or modify those decisions.

Reversed

The act of a higher court changing the decision of a lower court.

Trial Court

A court of law where cases are tried in the first instance, as opposed to an appellate court.

Remanded

refers to the act of sending a case back to the original jurisdiction from which it was appealed for further proceedings.