A Company Changes from an Accounting Principle That Is Not

question 68

Multiple Choice

A company changes from an accounting principle that is not generally accepted to one that is generally accepted.The effect of the change should be reported as a

• A) change in accounting principle.
• B) change in accounting estimate
• C) correction of an error.
• D) change of accounting estimate effected by a change in accounting principle.

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Definitions:

Bond Issue

entails a corporation or government raising funds by selling bonds to investors, which are debt securities obliging the issuer to pay interest and repay the principal at maturity.

Public Markets

Places or platforms where securities, commodities, or other financial instruments are bought and sold openly, involving a wide range of investors.

Seasoned Equity Offering

The process of offering additional shares for sale by a company that has already gone public.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, now held in the company's treasury.