Which of the following is/are true about accounting for errors and changes in accounting principles and changes in accounting estimates?
A)Firms account for material errors in previously issued financial statements by retrospectively restating net income of prior periods and adjusting the beginning balance in Retained Earnings of the current period.
B)If practical, firms account for voluntary changes in accounting principles, such as from a LIFO to a FIFO cost-flow assumption for inventories, by retrospectively restating net income of prior periods and adjusting the beginning balance in Retained Earnings of the current period.
C)Firms account for changes in accounting principles required by a new reporting standard in accordance with the guidance specified in the standard.
D)Firms account for changes in estimates, such as for depreciable lives, uncollectible accounts, or warranty cost, prospectively, in current and future periods' earnings.
E)all of the above

Question

Quizplus · Accepted Answer

All of the choices are correct. 
A) Firms need to correct material errors in previously issued financial statements by retrospectively restating net income of prior periods and adjusting the beginning balance in Retained Earnings of the current period.
B) Firms can account for voluntary changes in accounting principles, such as from LIFO to FIFO cost-flow assumption for inventories, by retrospectively restating net income of prior periods and adjusting the beginning balance in Retained Earnings of the current period, if it is practicable.
C) Firms need to account for changes in accounting principles required by a new reporting standard in accordance with the guidance specified in the standard.
D) Firms need to account for changes in estimates, such as for depreciable lives, uncollectible accounts, or warranty cost, prospectively, in current and future periods' earnings.

Which of the Following Is/are True About Accounting for Errors