Quiz 20.04 – T/F Prospective Approach and Financial Statement Restatements
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Financial statements from prior years are not restated when the prospective approach is used.
Financial statements from prior years are not restated when the prospective approach is used.
When a change in accounting principle occurs, a disclosure justifying the change is required in the first set of financial statements that follows the change.
The retrospective approach is used to account for all changes in estimate.
Note disclosure regarding the change in reporting entity is required in all subsequent financial statements prepared for the new entity.
Restatement of all affected prior year financial statements reported in comparative financial statements is necessary for error corrections.
For publicly traded corporations, which of the following changes is classified as a change in accounting principle?
What can be sacrificed when a change in accounting principle is reported?
What is the most important responsibility when any type of accounting change occurs?
Which of these is not a reporting approach for accounting changes?
In which financial statements is an accounting change reported using the prospective approach reflected?