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.

Question

Quizplus · Accepted Answer

A change in the method of inventory pricing from FIFO to LIFO is considered a change in accounting principle, as it affects the way the company values its inventory and therefore its financial statements. It requires retrospective application and disclosure in the financial statements. It is not part of discontinued operations or gross profit, and it is not a change in estimate as it is a change in the underlying accounting policy.

A Change in the Method of Inventory Pricing from FIFO