When a Change in Accounting Principle Occurs, The

question 10

Multiple Choice

When a change in accounting principle occurs, the:

• A) cumulative effect of the change should be reported in the current year's retained earnings statement.
• B) change should be reported retroactively.
• C) old accounting principle should be used for the current year.
• D) new accounting principle should be used starting in the current year, with no change to the prior years.

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Definitions:

Intangible Factor

An element in negotiations that cannot be easily quantified or measured, such as reputation or brand value.

Final Agreed Upon Price

The last price that all parties involved in a negotiation consent to, marking the completion of the negotiation process.

Zero-Sum Situation

A zero-sum situation is a scenario in economic theory or game theory where one participant's gain or loss is exactly balanced by the losses or gains of the other participants.

Distributive

Pertains to the allocation or distribution of resources among parties in a negotiation or decision-making context.