Which of the Following Is Characteristic of a Change in Accounting

question 23

Multiple Choice

Which of the following is characteristic of a change in accounting principle?

• A) Requires the reporting of pro forma amounts for prior periods
• B) Does not affect the financial statements of prior periods
• C) Never needs to be disclosed
• D) Should be reported by retrospectively adjusting the financial statements for all years reported,and reporting the cumulative effect of the change in income for all preceding years as an adjustment to the beginning balance of retained earnings for the earliest year reported

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Definitions:

Particular Situation

A specific set of circumstances or context that is distinct from others.

Cultural Influences

Refers to the impact of a society's values, beliefs, traditions, and norms on the behavior, perceptions, and practices of individuals and organizations.

Same Culture

Refers to a group of individuals who share similar values, beliefs, practices, and norms within a society or organization.

Individualism

An ideology that supports the preference of individual independence over the oversight and control by groups or the state.