Explanation LIFO Method of Inventory Valuation : Under LIFO method the inventory is assumed to be allocated to production and sale on last come first out basis, the inventory that has been purchased at last is used first in the production and sale and the closing inventory is computed accordingly. FIFO Method of Inventory Valuation: Under FIFO method the inventory is assumed to be allocated to production and sale on first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly. Effect of changes from FIFO to LIFO: As per GAAP, effect of changes in the accounting method requires a retrospective treatment. Retrospective treatment is required unless it is impracticable to be adoptedor unless the new or revised standard requires otherwise...

Intermediate Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (2nd Edition)

2nd Edition

ISBN: 9780134833101

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Chapter 21, Problem 21.2MC

To determine

The correct option.

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Chapter 21 Solutions

Intermediate Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (2nd Edition)

Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3Q Ch. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - Prob. 21.8Q Ch. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...

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Revenue recognition explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=816Q6pOaGv4;License: Standard Youtube License

The correct option.

Solution Summary: The author explains that the correct option is "b". The inventory is assumed to be allocated to production and sale on last come first out basis.

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The correct option.

Chapter 21 Solutions