When a Change in Accounting Policy Occurs

question 65

Multiple Choice

When a change in accounting policy occurs,

• A) nothing should be done.
• B) the new policy should be used in reporting the results of operations of the current year, and the cumulative income effect net of tax should be reflected on the statement of retained earnings as an adjustment to the opening balance.
• C) the cumulative effect of the change in policy should be reflected on the income statement as of the beginning of the next year.
• D) the cumulative effect of the change in accounting policy should be classified as an extraordinary item on the income statement.

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Definitions:

Effective Goals

Objectives that are clearly defined, measurable, achievable, relevant, and time-bound, guiding individuals or groups towards desired outcomes.

Goal Theory

A psychological framework that focuses on the motivational aspects of goal setting and achievement.

Do Your Best

An encouragement to exert maximum effort and strive for the highest level of performance or achievement in any endeavor.

Listening

The active process of receiving and understanding messages communicated by others.