If an Accounting Change Has No Material Effect on the Financial

question 63

Multiple Choice

If an accounting change has no material effect on the financial statements in the current year,but the change is reasonably certain to have a material effect in later years,the change should be:

• A)Referred to in the auditor's report for the current year.
• B)Disclosed in the notes to the financial statements of the current year.
• C)Disclosed in the notes to the financial statements and referred to in the auditor's report for the current year.
• D)Treated as a subsequent event.

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Definitions:

Order Of Relief

A court order that provides a debtor protection from creditors under bankruptcy proceedings.

Benefit Plans

Programs established by employers to provide various benefits to their employees, such as healthcare, retirement savings, and life insurance.

Unsecured Liabilities

Debts or obligations that are not protected by a security interest or collateral, making them riskier for lenders.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal.