When Changes in an Accounting Principle Impact Income of Periods

question 97

Multiple Choice

When changes in an accounting principle impact income of periods that were prior to the earliest presented on the financial statements:

• A)retained earnings is not adjusted.
• B)the cumulative impact on the earlier periods is reported as an adjustment to retained earnings in the earliest period presented.
• C)the cumulative impact on the earlier periods is reported as an adjustment to retained earnings in the latest period presented.
• D)none of the above occur.

---

Definitions:

Rewards

Positive reinforcements or incentives provided to encourage a particular behavior or action.

Path

A course of action or sequence of events proposed or taken as leading to a particular outcome or goal.

Entorhinal Cortex

The section of the medial temporal lobe containing grid cells that respond to very specific locations in the physical environment.

Grid Cells

Neurons in the entorhinal cortex that respond when an animal or person approaches a specific location in the physical environment.