Which of the Following Should NOT Be Reported Retroactively

question 24

Multiple Choice

Which of the following should NOT be reported retroactively?

• A) Use of an unacceptable accounting principle,then changing to an acceptable accounting principle
• B) Correction of an overstatement of ending inventory made two years ago
• C) Use of an unrealistic accounting estimate,then changing to a realistic estimate
• D) Change from a good faith but erroneous estimate to a new estimate

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Definitions:

General Journal Entry

An accounting record where transactions are initially recorded, detailing the accounts that are affected and the amounts, before the details are posted to the appropriate ledgers.

Discount Period

A specified time frame during which a discount is offered or can be taken advantage of.

Credit Terms

The conditions under which credit is extended by a seller to a buyer, including the repayment period, discount for early payment, and the due date.

Invoice Price

The amount that appears on an invoice as the cost of buying or procuring a product or service.