Question

1. (TCO E) Which of the following isnot treated as a change in accounting principle? (Points :5)

A change fromcompleted-contract to percentage-of-completion
A change from LIFO to FIFO forinventory valuation
A change from full-cost tosuccessful efforts in the extractive industry
A change to a different methodof depreciation for plant assets

Question 2. 2. (TCO E) What type of accountingchange/correction should always be accounted for in the current andfuture accounting periods? (Points : 5)

Change in accountingprinciple
Change in reportingentity
Change in accountingestimate
Correction of anerror

Question 3. 3. (TCO E) On December 31, 2013,Gifts Galore, Inc. appropriately changed its inventory valuationmethod from weighted-average cost to FIFO method for financialstatement and income tax purposes. The change will result in a$3,600,000 increase in the beginning inventory at January 1, 2013.Assume a 35% income tax rate. The cumulative effect of thisaccounting change on beginning retained earnings is (Points :5)

$0.
$1,260,000.
$3,600,000.
$2,340,000.