A Change in the Method of Inventory Pricing from FIFO

question 13

Multiple Choice

A change in the method of inventory pricing from FIFO to LIFO would be accounted for as a (an) :

• A) Part of discontinued operations
• B) Part of gross profit
• C) Change in accounting principle
• D) Change in estimate.

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Definitions:

Monopoly Firm

A company that is the sole provider of a product or service in a market, resulting in a lack of competition.

Price Maker

A market participant with the power to influence the price of a good or service by altering its supply, demand, or both.

Downward Sloping

Refers to a graph line that shows a decrease in price leading to an increase in demand, commonly illustrated in supply and demand curves.

Economic Profits

Profit or loss calculated by subtracting total costs, including opportunity costs, from total revenues to determine overall effectiveness.