How must a change in accounting policy be accounted for to preserve comparability and consistency in the financial statements? Select one: a. Changes to accounting policy must be accounted for retrospectively, i.e. amounts recognized in previous accounting periods are restated to account for the change in accounting policy. b. None of the above is correct c. Changes to accounting policy must be accounted for prospectively, i.e. resulting change should not have impact on prior period financial statement comparatives. d. Changes to accounting policy should not be allowed.
How must a change in accounting policy be accounted for to preserve comparability and consistency in the financial statements? Select one: a. Changes to accounting policy must be accounted for retrospectively, i.e. amounts recognized in previous accounting periods are restated to account for the change in accounting policy. b. None of the above is correct c. Changes to accounting policy must be accounted for prospectively, i.e. resulting change should not have impact on prior period financial statement comparatives. d. Changes to accounting policy should not be allowed.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter6: Accounting Quality
Section: Chapter Questions
Problem 14QE
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q16
How must a change in accounting policy be accounted for to preserve comparability and consistency in the financial statements?
Select one:
a. Changes to accounting policy must be accounted for retrospectively, i.e. amounts recognized in previous accounting periods are restated to account for the change in accounting policy.
b. None of the above is correct
c. Changes to accounting policy must be accounted for prospectively, i.e. resulting change should not have impact on prior period financial statement comparatives.
d. Changes to accounting policy should not be allowed.
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