A change from LIFO to FIFO should be accounted for

A) by footnote disclosure only
B) prospectively only
C) currently and prospectively
D) retrospectively

Question

A change from LIFO to FIFO should be accounted forA) by footnote disclosure onlyB) prospectively onlyC) currently and prospectivelyD) retrospectively

Jaldeep Virani · Accepted Answer

Final Answer : D, Explanation :  A change from LIFO to FIFO should be accounted for retrospectively, meaning the change should be reflected in the financial statements as if the change had been in effect all along. This includes adjusting the opening balance of retained earnings and all prior period financial statements. Footnote disclosure may also be necessary to provide additional information about the accounting change.

A change from LIFO to FIFO should be accounted for

A) by footnote disclosure only
B) prospectively only
C) currently and prospectively
D) retrospectively

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Learning Objectives

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