A Change to GAAP from a Principle That Is Not

question 59

Multiple Choice

A change to GAAP from a principle that is not generally accepted

• A) requires a retrospective application of the new accounting principle.
• B) requires prospective treatment.
• C) requires a retrospective adjustment or restatement.
• D) is a correction of an error and accounted for by a prior-period adjustment.

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Definitions:

Interest in Firm

The ownership stake or share in the financial success and decision-making of a business.

Capital Account

An account on a country's balance of payments that records transactions involving the acquisition or disposal of capital assets.

Old Partner

A former member of a partnership who has ceased to be part of the entity, often due to retirement or agreement termination.

Partnership Cash

Funds held and utilized within a partnership, which are contributed by and available to the partners according to the partnership agreement.