A Change in Accounting Principle Requires That the Cumulative Effect

question 38

Multiple Choice

A change in accounting principle requires that the cumulative effect of the change for prior periods be shown as an adjustment to

• A) beginning retained earnings for the earliest period presented.
• B) net income for the period in which the change occurred.
• C) comprehensive income for the earliest period presented.
• D) stockholders' equity for the period in which the change occurred.

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Definitions:

Homo Floresiensis

A species of small, extinct hominids, known as "hobbits," discovered on the Indonesian island of Flores, notable for their small size and ancient lineage.

Fossil Record

The collection of fossils, which serves as historical documentation of past life on Earth.

Stone Tools

Prehistoric tools made from stone by early humans, used in hunting, cutting, and as weapons.