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.

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Definitions:

SCIS

Supply Chain Information Systems; technology and software tools designed to enhance visibility, efficiency, and management of the supply chain from procurement to delivery.

Information Technology

The use of computers, software, and networks to store, process, and communicate information digitally for business operations.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness.

Reliance

Dependence or trust placed in a system, organization, or another person, often in a context where mutual dependencies are critical.