A voluntary change in accounting policy is allowed when management can show that the new policy results in
A)higher profit from continuing operations.
B)a more reliable and relevant presentation of transactions or events.
C)smaller write-downs on property, plant, and equipment.
D)larger write-downs on property, plant, and equipment.

Question

Quizplus · Accepted Answer

A voluntary change in accounting policy is only allowed when it results in a more reliable and relevant presentation of transactions or events. It should not be made simply to manipulate profit or to avoid write-downs. Therefore, options A, C, and D are incorrect.

A Voluntary Change in Accounting Policy Is Allowed When Management