A company that has used FIFO for the past 15 years decides to switch to...
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Accounting
A company that has used FIFO for the past 15 years decides to switch to moving weighted average. Which of the following statements describes the effect of this event on past years profit?
The cumulative effect is reported as an adjustment to ending retained earnings for the prior period.
The cumulative effect is ignored, as it is a change in an accounting estimate.
The cumulative effect is reported only on the current years income statement.
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