Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A) Changes in accounting policy are always handled in the current or prospective period.
• B) Prior year statements should always be restated for changes in accounting estimates.
• C) A change from the deferral and amortization method to the immediate recognition method of accounting for defined benefit pension plans should be treated as a change in accounting policy.
• D) Correction of prior period error should be presented as an adjustment on the current income statement.

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Definitions:

Risk-Free Return

The theoretical return on an investment with no risk of financial loss.

Wildcat Fund

A type of investment fund that takes on high-risk investments, hoping for significantly higher-than-average returns.

M2 Measure

A broad measurement of a country's money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits and money market securities.

T-Bills

Short-term government securities with maturity periods of one year or less, considered a safe and liquid investment.