All of the Following Are True Regarding Changes in Accounting

question 24

Multiple Choice

All of the following are true regarding changes in accounting principles EXCEPT:

• A) Accounting changes are allowed when new principles are preferred over previous ones.
• B) The company retrospectively restates all prior-period amounts as though the new accounting method had been in effect all along.
• C) The majority of the changes in accounting principles are reported in the current period when the change in principle occurred.
• D) If an accounting change impacts periods prior to the earliest one presented in the current income statement, an adjustment to retained earnings must be made.

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Definitions:

Statute Overrides

Legal provisions or acts that supersede or alter existing laws or agreements.

Litigation Process

The series of actions and procedures involved in taking a case through the courts, including filing lawsuits, discovery, trial, and possibly appeal.

Enforcement

The act of compelling compliance with laws, regulations, or standards.

Speedier Method

A more efficient and rapid process or technique to achieve a certain objective or outcome.