Chapter 20, Problem 20.1BE

(1)

To determine

Inventory costing methods: The costing method that is used to record the cost of goods sold and ending inventory in the financial statements is referred to as inventory costing methods.

Average cost method:  Inventory costing method that assumes average cost of all the units is referred to as average method.

First-in-first-out (FIFO): As the name implies, the inventory bought first is used or transferred out first.

To Journalize: The adjusting entry of B&B Incorporation for the year 2016.

(2)

To determine

To Describe: The other steps B & B Incorporation should take to report the change.