When an Accounting Change Is Reported Under the Retrospective Approach

question 28

Multiple Choice

When an accounting change is reported under the retrospective approach, account balances in the general ledger:

• A) Are not adjusted.
• B) Are closed out and then updated.
• C) Are adjusted net of the tax effect.
• D) Are adjusted to what they would have been had the new method been used in previous years.

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Definitions:

Polyethylene

A versatile synthetic polymer made from the polymerization of ethylene, widely used in plastic bags, containers, and packaging.

Addition Polymer

A polymer formed by the successive addition of monomer molecules with unsaturated bonds, leading to a long chain molecule.

Condensation Polymer

A polymer formed by the reaction where two molecules combine with the simultaneous elimination of a small molecule, such as water.

Hydrolyzed

The chemical process in which a molecule is split into two parts through the addition of water, breaking chemical bonds in the molecule.