A. Voluntary accounting policy change

B. Involuntary accounting policy change

C. Change in accounting estimate

D. Correction of an error

E. None of the above

_____ 1. This is the first year the company has incurred costs for development of a new product.

_____ 2. It was determined that an employee had been stealing inventory from the warehouse and this was not discovered until after year-end. The fraud had been concealed by adjusting inventory records.
_____ 3. Management decided to use the average cost for inventory instead of FIFO.
_____ 4. The number of years used for straight-line amortization was changed from 10 to 12.
_____ 5. Management decided to early adopt the revised Handbook section for financial instruments.

Required:

Use the letters given in the first list to indicate the type of accounting change appropriate for the examples on the second list.