An Accounting Change That Is Reported by the Prospective Approach

question 79

Multiple Choice

An accounting change that is reported by the prospective approach is reflected in the financial statements of:

• A) Prior years only.
• B) Prior years plus the current year.
• C) The current year only.
• D) Current and future years.

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Definitions:

Serious Intent

A legal concept indicating that a party has a genuine and earnest intention to enter into a binding contract.

Angry

A strong feeling of displeasure or hostility, often resulting from frustration, injustice, or threat.

Requirement Contract

A requirement contract is a legal agreement in which one party agrees to purchase all its needs for a specific good or service from the other party.

Output Contract

An agreement in which a seller agrees to sell all of the production to a particular buyer, who agrees to buy it.