Which Statement Is Correct

question 150

Multiple Choice

Which statement is correct?

• A)Accounting policy changes should reflect changes in economic circumstances.
• B)Accounting errors are corrected prospectively in the financial statements.
• C)Changes in accounting estimates are corrected retrospectively in the statements.
• D)Correction of accounting errors proves that management bias exists in reporting.

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Definitions:

Scarcity

Refers to the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Additional Unit

An extra item or piece beyond the current production or stock, often considered in decision-making regarding costs and prices.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.