A voluntary change in accounting principle is accounted for by:
A)A cumulative effect on income in the year of the change.
B)A retrospective reporting of all comparative financial statements shown.
C)A prior period adjustment.
D)A separate line component of income.

Question

Quizplus · Accepted Answer

A voluntary change in accounting principle requires retrospective reporting of all comparative financial statements shown. This means that the change should be applied retrospectively to all prior periods presented in the financial statements. This approach ensures that there is consistency and comparability between the financial statements for different periods. Therefore, choices A, C, and D are incorrect.

A Voluntary Change in Accounting Principle Is Accounted for By