Question: On January 1, 2019, PT A changed its inventory method to FIFO from average cost. The change resulted in an $50,000 increase for the prior

On January 1, 2019, PT A changed its inventory method to FIFO from average cost. The change resulted in an $50,000 increase for the prior year's net income on January 1, 2020. In beginning of 2020, the cumulative effect of the accounting change would make the balance of...

a. Retained Earnings increases for $50,000. b. Cost of Goods Sold decreases for $50,000. c. Inventory decreases for $50,000. d. no effect

Accrued salaries payable of $10,000 were not recorded at December 31, 2019. This payable were paid at January 2020. Office supplies on hand of $5,000 at December 31, 2020 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. The effect of these two errors would cause...

a. 2019 net income and December 31, 2019 retained earnings to be understated $10,000 each. b. 2020 net income and December 31, 2020 retained earnings to be understated $5,000 each. c. 2020 net income to be understated $15,000 and December 31, 2020 retained earnings to be understated $5,000. d. 2019 net income to be overstated $10,000 and 2020 net income to be understated $5,000.

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