6. An accounting change that involves going from FIFO to LIFO in accounting for

Question

6.

An accounting change that involves going from FIFO to LIFO in accounting for inventories would be handled using the prospective approach.

7.

In 2009, Zahi Inc. recorded a liability for probable litigation losses of $2 million.  In 2010, the actual loss from this litigation turned out to be $5 million.  If comparative statements are issued in 2010, 2009 income should be adjusted for the additional $3 million loss.

8.

One of the necessary steps in implementing a prospective approach to an accounting change is to make a journal entry to adjust for the previous years

Explanation / Answer

all answers confirmed

false

false

false

false

true

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