IASB Requires Companies to Use Which Method for Reporting Changes

question 38

Multiple Choice

IASB requires companies to use which method for reporting changes in accounting policies?

• A)cumulative effect approach
• B)retrospective approach
• C)prospective approach
• D)averaging approach

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders out of the company's profits.

Dividends Payable

A liability representing an amount owed by a company to its shareholders as a distribution of the company's earnings.

End of the Year

Typically refers to the close of the fiscal or calendar year, a key time for financial reporting and assessment for businesses.

Depreciation Expense

The allocation of the cost of a tangible asset over its service life, representing how much of an asset's value has been used up over time.