CAF-1 · Chapter 10 · Question 5 of 15
Which of the following is considered a 'change in accounting policy' rather than a 'change in estimate'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Changing the inventory cost formula from FIFO to Weighted Average.
Explanation
Changing the cost formula for measurement of inventory (e.g., FIFO to weighted average) is a change in measurement basis and constitutes a change in accounting policy.
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