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With Respect to a Retrospectively Applied Change in Accounting Policy

question 14

True/False

With respect to a retrospectively applied change in accounting policy, the effects on prior years' income is treated as an adjustment to opening retained earnings.


Definitions:

Equivalent Interest Rate

A rate that represents the annual interest yield of an investment or loan, taking into account the effects of compounding.

Nearest 0.01%

Measurement or calculation precision to the hundredth of a percent.

Equivalent Interest Rate

The interest rate that gives the same compounded financial outcome as other rates calculated over different time periods.

Nearest 0.01%

Rounding off a numerical figure to the closest one hundredth of a percent.

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