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:

Time-Driven

An approach that bases planning and scheduling on the amount of time tasks or processes take.

Activity-Based Costing

A costing method that assigns costs to products and services based on the activities required to produce the product or deliver the service.

Customer Support

The service provided by a company to assist its customers in using products or services efficiently and satisfactorily.

Time-Driven

An aspect or method that is based on the duration or amount of time required to perform tasks or processes.