Which of the following statements about changes to the LIFO inventory method from any other method is true?

Multiple Choice

• A disclosure note is needed.

• The income effect on prior years must be calculated.

• The change is reported retrospectively.

• The base year inventory for all future LIFO determinations is the ending inventory in the year the LIFO method is adopted.

The gross profit method for estimating ending inventory relies on the historical relationship between sales revenue and cost of goods sold.

True/False