Question

A change in accounting principle is evidenced by:

A. a change from the historical cost principle to current value accounting.
B. adopting the allowance method in estimating bad debts expense when a credit
sales policy is instituted.
C. changing the basis of inventory pricing from weighted-average cost to LIFO.
D. a change from current value accounting to the historical cost principle

Answer 1

The correct answer to what evidences a change in accounting principle is 'C. changing the basis of inventory pricing from weighted-average cost to LIFO,' which reflects a change from one accepted method to another that affects financial statements.

Step-by-step explanation:

A change in accounting principle is evidenced by a shift in the method or approach used in financial reporting or when a fundamental accounting method is altered. The correct answer to the question is:

C. changing the basis of inventory pricing from weighted-average cost to LIFO.

This represents a change in accounting principle because it involves a switch from one accepted accounting method to another, both of which can have a material effect on the financial statements. Other options either reflect a change in accounting estimate (B), an application of a principle to a new event or transaction (possibly B), or a change back to a broadly accepted method from a less common one (A and D), which might not qualify as changes in principle depending on the context.