A change in accounting principle requires what kind of adjustment to the financial statements?
A) Current period adjustment.
B) Prospective adjustment.
C) Retrospective adjustment.
D) Current and prospective adjustment.

Question

Quizplus · Accepted Answer

A change in accounting principle requires a retrospective adjustment, which means adjusting the financial statements for all prior periods presented as if the new accounting principle had always been used. This ensures that the financial statements are comparable over time.

A Change in Accounting Principle Requires What Kind of Adjustment