When an Accounting Change Is Reported Under the Retrospective Approach

question 80

Multiple Choice

When an accounting change is reported under the retrospective approach, prior years' financial statements are:

• A) Revised to reflect the use of the new principle.
• B) Reported as previously prepared.
• C) Left unchanged.
• D) Adjusted using prior period adjustment procedures.

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Definitions:

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are a variable cost.

Standard Cost

A predetermined cost of manufacturing a product or performing a service, used as a benchmark for measuring performance.

Direct Material

Represents raw materials that can be directly attributed to the production of specific goods, directly affecting the finished product's cost and quality.

Units

A measure or quantity used as a standard of measurement for expressing amounts, especially in the context of production or inventory.