An Example of the Correction of an Error in Previously

question 23

Multiple Choice

An example of the correction of an error in previously issued financial statements is a change

• A) From the completed contract to the percentage-of-completion method of accounting for long-term construction-type contracts.
• B) In the depletion rate, based on new engineering studies of recoverable mineral resources.
• C) From the sum-of-years-digits to the straight-line method of depreciation for all plant assets.
• D) From the installment basis of recording sales to the accrual basis, when collection of the sales price has been and continues to be reasonably assured

---

Definitions:

Variance

A measure of the dispersion or spread of a set of data points around their mean, indicating how much the data points differ from the mean.

Standard Normal Random Variable

A random variable with a mean of zero and a standard deviation of one, following the standard normal distribution, which is a specific instance of the normal distribution.

Average Balance

Average balance is a financial term referring to the sum of all balances during a certain period divided by the number of days in that period, often used in banking to assess fees or determine interest.

Standard Deviation

An evaluation of how spread out or dispersed a collection of data points is.