When there has been a change in accounting principle,
A)the old principle should be used in reporting the results of operations for the current year.
B)the cumulative effect of the change should be reported in the current year's retained earnings statement.
C)the change should be reported retroactively.
D)the new principle should be used in reporting the results of operations of the current year, but there is no change to prior years.

Question

Quizplus · Accepted Answer

When there is a change in accounting principle, it should be reported retroactively, meaning prior period financial statements are restated as if the new principle had always been used.

When There Has Been a Change in Accounting Principle