When an Accounting Change Is to Be Recorded and Reported

question 109

Multiple Choice

When an accounting change is to be recorded and reported under the Retrospective approach, the:

• A)Pro forma financial statements for future years must be disclosed.
• B)Effect of the change is spread over the past, current, and future accounting periods.
• C)Cumulative effect of the change is reported as a special item in the income statement in the year of the change.
• D)Retained earnings is adjusted for the cumulative effect of the change.

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Definitions:

Negative Punishment

A behavioral modification technique involving the removal of a desirable stimulus to decrease the likelihood of a behavior occurring again.

Time-Out

A behavioral modification technique involving temporary isolation or removal from a situation to decrease undesirable behavior.

Spanked

The act of hitting someone, usually a child, with an open hand as a form of punishment.

Discrimination

Unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or gender.