Journal Entry on January 1,2016 to Effect the Change in Principle

question 64

True/False

Journal entry on January 1,2016 to effect the change in principle is:
Retained Earnings-Prior Period Adj. 27,000

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Definitions:

Maximum Cost

The highest possible expense that can be incurred for a specific activity, project, or purchase.

Method

A systematic way of accomplishing something. In a financial context, this could refer to a specific approach or procedure adopted for accounting or analysis purposes.

Average Rate of Return Method

A method of evaluating capital investments by calculating the average annual profit expected from the investment and dividing it by the initial investment cost.

Present Value

The contemporary valuation of a future money sum or cash flow series, based on a predetermined return rate.