Retrospective treatment of prior years' financial statements is required when there is a change from:
A)Average cost to FIFO.
B)FIFO to average cost.
C)LIFO to average cost.
D)All of these.

Question

Quizplus · Accepted Answer

Retrospective treatment of prior years' financial statements is required when there is a change in accounting policy that affects comparability. Changes from average cost to FIFO, FIFO to average cost, and LIFO to average cost all affect the cost of goods sold and inventory values, thus requiring retrospective treatment to ensure comparability between financial statements.

Retrospective Treatment of Prior Years' Financial Statements Is Required When