Normally, a Material Effect from Changing Accounting Principles Should Be

question 73

Multiple Choice

Normally, a material effect from changing accounting principles should be reported

• A)as an extraordinary item
• B)as a retrospective adjustment
• C)by including the cumulative effect of the change as a separate line item in current income from continuing operations
• D)by including the cumulative effect of the change on prior periods' earnings as a component of net income in the period of the change

---

Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.

Base-Rate Information

Statistical information about the relative frequency of events or characteristics within a given population.

Concentrated Practice

An intense form of study or skill acquisition in which an individual focuses their efforts on improving a particular area or task for a short, dedicated period of time.