A Company Has Changed Its Method of Inventory Valuation from an Unacceptable

question 1

Multiple Choice

A company has changed its method of inventory valuation from an unacceptable one to one in conformity with generally accepted accounting principles. The auditor's report on the financial statements of the year of the change should include

• A) no reference to consistency.
• B) a reference to a prior period adjustment in the opinion paragraph.
• C) an explanatory paragraph that justifies the change and explains the impact of the change on reported net income.
• D) an explanatory paragraph explaining the change.

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Definitions:

Club Moss

A type of non-flowering plant belonging to the Lycopodiophyta division, known for its moss-like appearance and reproductive via spores.

Megaspore

The n spore in heterosporous plants that gives rise to a female gametophyte. Compare with microspore.

Sporophyte Generation

A phase in the life cycle of plants and algae that is diploid, producing spores through meiosis to give rise to the gametophyte generation.

Haploid

Describes a cell or organism that contains a single set of chromosomes, typical of gametes in sexually reproducing organisms.