When a company changes from one accounting principle to another, the income statement for the year of change
A) will normally not be affected, as this event is taken directly to Retained Earnings.
B) should include only footnote disclosure so readers will be aware of the change.
C) should include the cumulative effect, based on a retroactive computation, disclosed as a separate-line item.
D) should include the effect of the change related to the current year only and be disclosed as a separate line item.

Question

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The Answer of When a company changes from one accounting principle to another, the income statement for the year of change
A) will normally not be affected, as this event is taken directly to Retained Earnings.
B) should include only footnote disclosure so readers will be aware of the change.
C) should include the cumulative effect, based on a retroactive computation, disclosed as a separate-line item.
D) should include the effect of the change related to the current year only and be disclosed as a separate line item.

When a Company Changes from One Accounting Principle to Another