A Change That Uses the Prospective Approach Is Accounted for By

question 105

Multiple Choice

A change that uses the prospective approach is accounted for by:

• A) Implementing it in the current year.
• B) Reporting pro forma data.
• C) Retrospective restatement of all prior financial statements in a comparative annual report.
• D) Giving current recognition of the past effect of the change.

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Definitions:

Budget Period

The time frame for which a budget is planned and implemented, often one fiscal year.

One Month

A period of time extending roughly from a specific date in one calendar month to the corresponding date in the next calendar month.

One Year

A period consisting of 12 consecutive months or 365 days.

Budget Period

A specific time frame for which financial planning, expenditure, and allocations are made and tracked.