Which of the following items would not be accounted for under current GAAP as a change in estimate?
A) an increase in the expected life of a piece of manufacturing equipment
B) a decrease in the estimated residual value of a delivery van
C) a change from FIFO to LIFO for a small subsidiary
D) an increase in defective items for the best selling video game

Question

Quizplus · Accepted Answer

A change from FIFO to LIFO for a small subsidiary is considered a change in accounting principle, not a change in estimate. Changes in estimates (like A, B, and D) involve revisions of estimates used in the preparation of financial statements, whereas changes in accounting principles involve switching from one generally accepted accounting principle to another.

Which of the Following Items Would Not Be Accounted for Under