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:

Ovum

The female reproductive cell or egg cell in animals and plants.

Fimbriae

Fringe-like projections at the end of the fallopian tubes near the ovaries, involved in guiding the egg into the tube.

Flagella

Long, slender projections from a cell that are used for locomotion or sensory functions.

Filum

A slender thread-like structure, especially one found in the anatomy of animals, such as the filum terminale in the human spine.