Energy,Inc began operations in 2015 using LIFO inventory methods.In 2016,management decided they should have chosen FIFO.The beginning inventory for 2016 using LIFO was $125,000.Under the FIFO method,the beginning inventory would have been $140,000.The adjustment to inventory for the change in accounting principle for 2016 would be ________.
A)$0
B)$15,000 debit
C)$15,000 credit
D)$30,000 debit

Question

Quizplus · Accepted Answer

The adjustment to inventory for the change from LIFO to FIFO is the difference between the beginning inventory under FIFO and LIFO, which is $140,000 - $125,000 = $15,000. This requires a $15,000 debit to inventory to increase it to the FIFO amount.

Energy,Inc Began Operations in 2015 Using LIFO Inventory Methods