Salesforce CRT-450 Q&A - in .pdf

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NEW QUESTION: 1
Goddard has used the FIFO method of inventory valuation since it began operations in 1987. Goddard decided to change to the weighted-average method for determining inventory costs at the beginning of 1990. The following schedule shows year-end inventory balances under the FIFO and weighted-average methods:

What amount, before income taxes, should be reported in the 1990 retained earnings statement as the cumulative effect of the change in accounting principle?
A. $5,000 decrease.
B. $0.
C. $2,000 increase.
D. $3,000 decrease.
Answer: A

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