A Company Can Change to a New Accounting Principle If

question 93

Multiple Choice

A company can change to a new accounting principle if management can justify that the change will result in

• A) less likelihood of clerical errors.
• B) higher net income.
• C) lower net income for tax purposes.
• D) more relevant information for decision-making.

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Definitions:

Partial Payment

A payment that covers only a portion of the total amount due on a debt, bill, or other financial obligation.

Statute of Frauds

A legal principle requiring certain types of contracts, such as those concerning real estate or lasting more than a year, to be in writing to be enforceable.

Sale of Land

The process of transferring ownership of a parcel of real estate from one party to another, typically involving a written contract and the payment of an agreed-upon price.

Domestic Agreements

Legal contracts between individuals in a personal relationship, outlining the terms of matters such as property division or spousal support.