1. Which of the following statements about changes in accounting estimates are correct?2. At the end of Year 1, Schule Company incorrectly recorded notes payable as accounts payable. The error was discovered during Year 3. The companys Year 3 annual report includes comparative financial statements covering Years 2 and 3. The company should:

A revision of an original estimate made in bad faith should be accounted for as a correction of an error. Changes in accounting estimates are accounted for prospectively. Changes in accounting estimates are accounted for retrospectively. When a company revises a previous estimate, prior financial statements are revised. When a company revises a previous estimate, prior financial statements are not revised. Record a journal entry to correct the notes payable and accounts payable balances. Retrospectively restate the Year 2 balance sheet to reflect the correction. Report the correction as a prior period adjustment to the beginning balance of retair Include the nature of the error in a disclosure