A Change in Accounting Principle Requires What Kind of Adjustment

question 29

Multiple Choice

A change in accounting principle requires what kind of adjustment to the financial statements?

• A) Current period adjustment.
• B) Prospective adjustment.
• C) Retrospective adjustment.
• D) Current and prospective adjustment.

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Definitions:

Unprofitable Products

Items or services that generate less revenue than the cost associated with producing and selling them.

Price Elasticity

An indicator of the sensitivity of the amount of a good demanded in response to its price changes.

Cost-Plus Pricing

A technique for pricing where a distinct markup is added to the unit cost of a product to establish its selling price.

Linear Programming

A mathematical method used to determine the best possible outcome or solution from a given set of parameters or constraints, usually applied in maximizing or minimizing a linear function.