Changes in Accounting Principles

question 86

Multiple Choice

Changes in accounting principles:

• A)are reported for the current and future periods on the new basis.
• B)require the company to retrospectively restate all prior-period amounts presented for comparative purposes.
• C)are not allowed under GAAP.
• D)are shown on the balance sheet.

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Definitions:

Individual Sales

Transactions that target single customers rather than large orders or sales to businesses, focusing on personalized experiences or customization.

Financial Reporting

Financial reporting involves the disclosure of financial results and related information to management and external stakeholders, such as investors or regulators.

Future Cash Flows

The projected cash receipts and payments a business expects over a period in the future, important for investment and valuation purposes.

Net Income

Profit of a company after all expenses and taxes have been subtracted from total revenue.