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Homework answers / question archive / The Green Corp changed its method of inventory accounting from LIFO to FIFO
The Green Corp changed its method of inventory accounting from LIFO to FIFO. This change represents a change in accounting estimate that should be treated prospectively o change in accounting principle that should be treated prospectively change in accounting estimate for which the financial results of previous years are restated o change in accounting principle for which the financial statements of prior periods included for comparative purposes are restated
The Correct answer is Change in accounting principle for which the financial statements of prior periods included for Comparative purposes are restated.
As switching from LIFO to FIFO will have significant impact on all financial statements , therefore Company who is switching from one method of inventory accounting to other method will required to consider , whether its needs to restate its financial data for prior years to reflect the effects of new methods to the current and future years.
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