Most Changes in Accounting Principle Require a Disclosure Justifying the Change

question 22

True/False

Most changes in accounting principle require a disclosure justifying the change in the first set of financial statements after the change is made.

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Definitions:

Asset Account

An account that records the value of assets owned by an individual or organization, including cash, equipment, and inventory.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to generate wealth through investment or production.

Services for Cash

Transactions in which services are provided with immediate payment in cash, not involving credit terms.

Liability

An obligation of a company or an individual arising from past transactions or events, leading to a future outflow of assets.