A company should report a cumulative effect of an accounting principle change when
A)consistency has been violated.
B)errors are made and subsequently corrected.
C)FASB mandates a change from one method to another.
D)international reporting standards differ from GAAP methods.

Question

Quizplus · Accepted Answer

According to GAAP, a company should report a cumulative effect of an accounting principle change when FASB mandates a change from one method to another. The effect of the change should be reported in the current year's financial statements as an adjustment to the beginning balance of retained earnings, net of any tax effects.

A Company Should Report a Cumulative Effect of an Accounting