Multiple Choice
On January 1, 2015, JTC changed to the weighted-average cost method from the first-in, first-out (FIFO) cost method for inventory cost flow purposes.JTC can justify this as a change in policy.The change will result in a $120,000 decrease in the beginning inventory at January 1, 2015.Ignoring income taxes, the cumulative effect of changing to the weighted-average method from the FIFO method must be reported by JTC in the 2015:
A) Statement of retained earnings as a $120,000 debit adjustment to the beginning balance.
B) Income statement as a $120,000 debit.
C) Income statement as a $120,000 credit.
D) Statement of retained earnings as a $120,000 credit adjustment to the beginning balance.
Correct Answer:
Verified
Correct Answer:
Verified
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