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Explain How Changes in Accounting Policies, Changes in Accounting Estimates

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Essay

Explain how changes in accounting policies, changes in accounting estimates and errors are accounted for under the accrual basis of accounting.


Definitions:

Loan Covenant

A condition in a commercial loan agreement that requires the borrower to fulfill certain conditions, or restricts certain activities, to protect the lender's interests.

Accounting Measure

A quantifiable financial metric used to assess a company's performance or financial health, based on accounting records.

Financial Statements

Reports that summarize the financial condition and operations of a business.

Timeliness

Timeliness refers to the speed with which financial information is reported and made available to users, affecting its relevance and decision-making utility.

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