Question: The various types of accounting changes may significantly affect the presentation of a companys financial statements, and also affect the trends shown in its comparative

The various types of accounting changes may significantly affect the presentation of a company’s financial statements, and also affect the trends shown in its comparative financial statements and historical summaries.
Required
1. Explain a change in accounting principle and how a company reports it in the period of the change.
2. Explain a change in accounting estimate and how a company reports it in the period of the change.
3. Explain a change in reporting entity and how a company reports it. Give an appropriate example of a change in reporting entity.

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1 A change in accounting principle results from adoption of a generally accepted accounting principle different from the one used previously for repor... View full answer

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