When a Company Makes a Change in an Estimate That

question 42

Multiple Choice

When a company makes a change in an estimate that it has used in its financial statements,it should account for the change by:

• A) retroactively restating all prior financial statements
• B) treat the change as a cumulative effect change in accounting estimate
• C) spread the effect of the change over the current and future periods
• D) companies are not allowed to make changes to estimates

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Definitions:

Organizational Competitors

Other entities that offer similar products or services and compete for the same market share.

Information Gathering

Information gathering refers to the systematic collection of data and facts relevant to a specific topic or project.

Economic Uncertainty

A condition in which there is a lack of confidence or predictability regarding the state of the economy, often leading to volatility in markets and investment decisions.

HR Managers

Professionals responsible for overseeing the functions of the human resources department, including recruitment, training, performance management, and employee relations.