If a Cumulative Effect Type Accounting Change Is Made During

question 40

Multiple Choice

If a cumulative effect type accounting change is made during the first interim period of a year:

• A) no cumulative effect of the change should be included in net income of the period of change.
• B) the cumulative effect of the change on retained earnings at the beginning of the year should be included in net income of the first interim period.
• C) the cumulative effect of the change should be allocated to the current and remaining interim periods of the year.
• D) none of these.

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Definitions:

Seafloor Spreading

The process by which two oceanic plates move apart and new magmatic material is added between the plates.

Continental Rifting

The pulling apart of a continent, forming a low, fault-bounded trough (continental rift); may lead to a divergent plate boundary that leads to seafloor spreading and splitting apart a continent.

Continental Shelves

Submerged landforms at the edges of continents, extending from the coastline to a sharp drop-off into the deeper ocean floor.

Shallow Seawater

Areas of the ocean that are not deep, often found near coastlines, characterized by relatively low depths.