A Company Can Change to a New Accounting Principle If

question 32

Multiple Choice

A company can change to a new accounting principle if management can justify that the change will result in

• A)less likelihood of clerical errors.
• B)higher profit.
• C)lower profit for tax purposes.
• D)more relevant information for decision-making.

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Definitions:

S-8

S-8 is a form filed with the SEC used by publicly traded companies to register securities that will be offered to employees through an employee benefit plan.

Form 8-K

A report filed by publicly traded companies to announce major events that shareholders should know about, including acquisitions, disposals, and changes in control.

Significant Events

Major occurrences that have a profound effect on a company's operations and financial statements, such as mergers, acquisitions, or natural disasters.

Securities Accounting Standards (SASs)

A set of guidelines and rules for the accounting and reporting of transactions involving securities.