Which of the Following Statements Is True with Respect to Financial

question 51

Multiple Choice

Which of the following statements is true with respect to financial statement reporting 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.

---

Definitions:

Excess (Deficiency)

The amount by which actual income exceeds or falls short of the budgeted amount.

Cash Budget

A financial tool used by businesses to plan for their cash inflows and outflows over a specific period to manage liquidity.

Budgeted Disbursements

Forecasted cash outflows for a specific period, often part of a company's cash budget and crucial for managing liquidity.

Desired Balance

The targeted amount of funds or resources a company or individual aims to have available at a certain point in time for a specific purpose.