2A4E FINER FOODS INC., A CHAIN OF SUPERMARKETS SPECIALIZING IN GOURME...

104.

CSO: 2A4e

LOS: 2A4e

Finer Foods Inc., a chain of supermarkets specializing in gourmet food, has been using

the average cost method to value its inventory. During the current year, the company

changed to the first-in, first-out method of inventory valuation. The president of the

company reasoned that this change was appropriate since it would more closely match

the flow of physical goods. This change should be reported on the financial statements as

a

a.

cumulative-effect type accounting change.

b.

retroactive-effect type accounting change

c.

change in an accounting estimate.

d.

correction of an error.