Which of the Following Statements Is Correct

question 52

Multiple Choice

Which of the following statements is correct?

• A) Changes in accounting principle are always handled in the current or prospective period.
• B) Prior statements should be restated for changes in accounting estimates.
• C) A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate.
• D) Correction of an error related to a prior period should be considered as an adjustment to current year net income.

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Definitions:

Effective

Relating to the ability to successfully achieve a desired or intended result.

Physical Principles

Fundamental concepts or laws that govern the physical behavior of the universe, such as gravity, thermodynamics, and electromagnetism.

Mental Images

Visual representations in the mind that are not currently being perceived, often used in memory and problem-solving.

Structural Equivalence

A concept often used in network analysis and sociology, referring to the degree to which entities in a network have a similar pattern of connections to others, irrespective of the entities' individual attributes.