A change in an accounting estimate is:
A)Reflected in past financial statements
B)Reflected in future financial statements and also requires modification of past statements
C)A change in a calculated amount that is part of financial statements that results from new information or subsequent developments and from better insight or improved judgment
D)Not allowed under current accounting rules
E)Considered an error in the financial statements

Question

Quizplus · Accepted Answer

A change in accounting estimate is a change in a calculated amount that is a part of financial statements and results from new information or subsequent developments and from better insight or improved judgment. It is reflected in the financial statements of the current and future periods but does not require modification of past statements.

A Change in an Accounting Estimate Is