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:

Semi-annual Scholarships

Scholarships awarded twice a year, often to support the educational expenses of students.

Compounded Annually

Pertains to the calculation of interest on both the initial principal and the accumulated interest from previous periods, applied once per year.

Perpetuity

A financial instrument that pays a constant stream of interest payments indefinitely.

Compounded Monthly

Calculating interest on a principal sum along with any accumulated interest of the previous periods with each cycle occurring every month.