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:

Mark-up on Cost

The percentage added to the cost of goods to cover overhead and profit; the difference between the cost of a product and its selling price.

Operating Expenses

The day-to-day expenses involved in running a business, such as rent, utilities, and payroll, crucial for maintaining operations.

Office Furniture

Furniture engineered for use in a workplace setting, including desks, chairs, and filing cabinets.

Mark-up

The supplementary cost added to goods for overhead coverage and profit realization.