When a Company Changes from One Acceptable Accounting Method to Another

question 89

Multiple Choice

When a company changes from one acceptable accounting method to another, the change is reported

• A) in the statement of retained earnings, as a correction to the beginning balance.
• B) in the income statement, below income from continuing operations.
• C) in the income statement, above income from continuing operations
• D) through a retroactive restatement of prior period earnings.

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Definitions:

Veto Power

The authority to reject or block a decision, proposal, or law, often held by an executive branch over legislative actions.

Legislative Branch

The part of government responsible for making laws, consisting of legislatures or parliaments.

Contract Clause

The clause in the U.S. Constitution that prohibits the government from unreasonably interfering with an existing contract.

United States Constitution

The supreme law of the United States, establishing the framework of the national government and defining the rights of citizens.