1. (TCO E) Which of the following is not treated as a change in accounting principle? (Points : 5)

A change from completed-contract to percentage-of-completion A change from LIFO to FIFO for inventory valuation A change from full-cost to successful efforts in the extractive industry A change to a different method of depreciation for plant assets

Question 2. 2. (TCO E) What type of accounting change/correction should always be accounted for in the current and future accounting periods? (Points : 5)

Change in accounting principle Change in reporting entity Change in accounting estimate Correction of an error

Question 3. 3. (TCO E) On December 31, 2013, Gifts Galore, Inc. appropriately changed its inventory valuation method from weighted-average cost to FIFO method for financial statement and income tax purposes. The change will result in a $3,600,000 increase in the beginning inventory at January 1, 2013. Assume a 35% income tax rate. The cumulative effect of this accounting change on beginning retained earnings is (Points : 5)

$0. $1,260,000. $3,600,000. $2,340,000.