1) A cumulative effect of a change in an accounting principle is measured as?

A) the after-tax difference between prior periods’ net income under the old method and what would have been reported if the new method had been used in the prior years.

B) the after-tax difference between prior periods’ net income and current net income under the old method and what would have been reported if the new method had been used in the prior years and the current year

C) the difference between prior periods’ net income and current net income under the old method and what would have been reported if the new method had been used in the prior years and the current year.

D) the difference between prior periods’ net income under the old method and what would have been reported if the new method had been used in the prior years.

2) On December 31, 20X1, Katherine Company purchases merchandise with shipping terms FOB destination. The company’s accountant records the purchase on the day the order is placed. The merchandise is not included in the ending inventory. No additional journal entry is made when the merchandise arrives on January 5, 20X2.

Assume that Katherine Company discovers the error at the beginning of 20X2. What journal entry should be made to correct the prior-year error?

A)Debit Inventory, Credit Retained Earnings

B)No journal entry is necessary

C) Debit Inventory, Credit Cost of Goods Sold

D) Debit Retained Earnings, Credit Inventory

3) A change from the LIFO to the FIFO inventory method represents a(n)

A)correction of error

B)change in accounting principle

C)change in accounting estimate

D) change in entity.