Energy, Inc began operations in 2018 using LIFO inventory methods. In 2019, management decided they should have chosen FIFO. The beginning inventory for 2019 using LIFO was $128,000. Under the FIFO method, the beginning inventory would have been $157,000. The adjustment to inventory for the change in accounting principle for 2019 would be ________.
A) $0
B) $29,000 debit
C) $29,000 credit
D) $58,000 debit

Question

Quizplus · Accepted Answer

The adjustment to inventory for the change from LIFO to FIFO is the difference between the beginning inventory under FIFO and LIFO, which is $157,000 - $128,000 = $29,000. This would be a debit to inventory.

Energy, Inc Began Operations in 2018 Using LIFO Inventory Methods