Which of the Following Would Be Considered a Change That

question 46

Multiple Choice

Which of the following would be considered a change that affects consistency?

• A) Change in accounting estimate.
• B) Change in accounting principle.
• C) Change in classification and reclassification.
• D) All of the other options are correct.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment.

Fiscal Year

A fiscal year is a 12-month period used for accounting purposes, often not aligning with the calendar year, to report financial performance.

Ledger

A comprehensive collection of a company's financial accounts, where all transaction data is recorded, including debits and credits.

Adjusting Entries

Journal entries made at the end of an accounting period to record revenues to the period they are earned and expenses to the period incurred.