When a Company Makes a Change in an Estimate That

question 42

Multiple Choice

When a company makes a change in an estimate that it has used in its financial statements,it should account for the change by:

• A) retroactively restating all prior financial statements
• B) treat the change as a cumulative effect change in accounting estimate
• C) spread the effect of the change over the current and future periods
• D) companies are not allowed to make changes to estimates

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Definitions:

Urinary Tract Infections

Infections occurring anywhere along the urinary tract, including the bladder and kidneys, often caused by bacteria.

Type 2 Diabetes Mellitus

A metabolic disorder characterized by high blood sugar levels over a prolonged period due to insulin resistance and relative lack of insulin.

Cephalexin

An antibiotic used to treat a wide variety of bacterial infections, particularly those involving the respiratory tract, skin, and urinary system.

Antidiarrheal Agent

A medication used to reduce the frequency of diarrhea or to slow the passage of stool through the intestine.