Which of the Following Is Characteristic of a Change in an Accounting

question 36

Multiple Choice

Which of the following is characteristic of a change in an accounting estimate?

• A) It usually need not be disclosed
• B) It does not affect the financial statements of prior periods
• C) It should be reported through the restatement of the financial statements
• D) It makes necessary the reporting of pro forma amounts for prior periods

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Definitions:

Joint Costs

Costs incurred in the process of producing two or more products simultaneously up to a split-off point, where they become distinguishable.

Market Value at Split-Off Method

A method used in accounting to allocate joint costs to products based on their market values at the point where the products are separable or "split off" from the joint process.

Joint Costs

Costs incurred in the process of producing two or more joint products before the point at which the products become separately identifiable.

Joint Costs Method

An accounting approach used to allocate costs among multiple products that are produced simultaneously from the same process or materials.