Question
Which of the following describes the accounting for changes in accounting principles and estimates? Select one: A. In order to maintain comparability of the financial
Which of the following describes the accounting for changes in accounting principles and estimates?
Select one:
A. In order to maintain comparability of the financial information across interim reporting periods, the FASB recommends that companies adopt any accounting changes during the first interim period of a fiscal year.
B. Whenever a change in accounting principles is made, accounting standards require that the change be made retrospectively, with a cumulative adjustment to the beginning balance of assets and liabilities affected by the change in the earliest period reported, and an offsetting adjustment to Retained Earnings.
C. When a change in accounting principle is made in an interim period, the effect of the change on prior interim periods should be made retrospectively by adjusting each prior interim financial statement for the effects of the change.
D. All of the above
E. Both A and C
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