Which of the Following Is Characteristic of a Change in Accounting

question 29

Multiple Choice

Which of the following is characteristic of a change in accounting estimate?

• A) Requires the reporting of pro forma amounts for prior periods
• B) Does not affect the financial statements of prior periods
• C) Never needs to be disclosed
• D) Should be reported by retrospectively adjusting the financial statements for all years reported,and reporting the cumulative effect of the change in income for all preceding years as an adjustment to the beginning balance of retained earnings for the earliest year reported

---

Definitions:

Foreseen Past Events

Events in the past that were predicted or expected based on available information or trends at that time.

Retroactively

Applying to actions, events, or decisions that have already occurred, often involving changes to laws or regulations that affect past behaviors or situations.

Planning Fallacy

A cognitive bias that causes people to underestimate the time, costs, and risks of future actions and overestimate the benefits.

Behind Schedule

Referring to a situation where a project or task takes longer to complete than originally planned or expected.