A Company Changed Its Method of Inventory Pricing from Last-In

question 6

Multiple Choice

A company changed its method of inventory pricing from last-in, first-out to first-in, first-out during the current year. Generally accepting accounting principles require that this change in accounting method be reported by:

• A) Accounting for the effects of the change in the current and future periods.
• B) Showing the cumulative effect of the change in the current year's financial statements and pro forma effects on prior year's financial statements in an appropriate footnote
• C) Disclosing the reason for the change in the "significant accounting policies" footnote for the current year but not restating prior year financial statements
• D) Applying retroactively the new method in restatements of prior years and appropriate footnote disclosures

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Definitions:

Technology Tools

Digital devices, software, or resources used to enhance productivity, solve problems, or facilitate tasks and processes.

Micro-multinational Corporation

A small company that operates in various countries, leveraging technology and globalization to access international markets.

E-commerce Start-up

A business that is initiated on the internet selling goods, services, or both to consumers, operating primarily in the digital ecosystem.

World Economic Forum

An international organization for public-private cooperation that engages business, political, academic, and other leaders of society to shape global, regional, and industry agendas.