Explain accounting treatment of material inventory errors


Consider the following questions:

1. When a company changes its inventory method to LIFO, an exception is made for the way accounting changes usually are reported. Explain the difference in the accounting treatment of a change to the LIFO inventory method from other inventory method changes.

2. Explain the accounting treatment of material inventory errors discovered in an accounting period subsequent to the period in which the error is made.

 

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Accounting Basics: Explain accounting treatment of material inventory errors
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