Which of the Following Statements Is True with Respect to Financial

question 153

Multiple Choice

Which of the following statements is true with respect to financial statement reporting of a change in accounting principle?

• A)Comparability across periods is impaired
• B)Only a footnote is required to report the change
• C)Changes in both depreciation methods and inventory methods are reported retroactively.
• D)Management must show that the new accounting principle is preferable to the old method.

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Definitions:

Contribution Report

A document or statement that details the contributions made towards specific goals or projects, often used in fundraising or accounting contexts.

Variable Manufacturing Costs

These are costs that vary directly with the level of production output, including materials, labor, and certain overheads.

Salespersons

Individuals who sell goods and services to customers, aiming to meet customer needs and achieve sales targets.

Absorption Costing

An accounting approach that incorporates all costs of production, including both variable and fixed overheads, into the price of a product.