A Change from One Acceptable Accounting Method to Another Is

question 62

Multiple Choice

A change from one acceptable accounting method to another is reported

• A) on the statement of retained earnings, as a correction to the beginning balance
• B) on the income statement, below income from continuing operations
• C) on the income statement, above income tax expense
• D) through a retroactive restatement of prior period earnings

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Definitions:

Interest Rate

is the cost of borrowing money or the return for investing, usually expressed as a percentage of the principal over a one-year period.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, positing that consumption patterns are directly related to income levels.

Price Level

A measure of the average prices of goods and services throughout the economy, indicating the cost of living or inflation rate.

Net Wealth

The total value of all financial and non-financial assets owned by an individual, company, or country, minus any debts.