Choose the Correct Statement Regarding Accounting Changes

question 12

Multiple Choice

Choose the correct statement regarding accounting changes.

• A) All changes in accounting principle require a cumulative effect to be recognized in the income statement.
• B) Changing from FIFO to Weighted Average is a retrospective accounting principle change.
• C) Income statements numbers are required to be disclosed for most accounting principle changes.
• D) The amount of the correction for an error affecting previous earnings will be disclosed in current earnings.

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Definitions:

Allan Baddeley

A cognitive psychologist best known for his work on the model of working memory.

Short-term Memory

A component of memory where small amounts of information can be stored for a short period of time, typically seconds to minutes.

Working Memory

A cognitive system with a limited capacity that is responsible for temporarily holding information available for processing.

Elaborative Rehearsal

Elaborative rehearsal is a technique to improve memory by linking new information with existing memories and knowledge, thereby increasing the likelihood of recalling it later.