Which type of accounting change may be accounted for in current and future periods only?
A) change in accounting estimate
B) change in inventory costing method
C) change in accounting policy
D) correction of an error

Question

Quizplus · Accepted Answer

A change in accounting estimate is a prospective accounting change that reflects a new estimate or judgment about the effect of an accounting item. It is applied in current and future periods only and does not require the adjustment of prior period amounts.

B, C, and D require retrospective application, which means restating prior period amounts to reflect the change. A change in inventory costing method is a change in accounting policy, while correction of an error is a retrospective accounting change that corrects an error made in a prior period.

Which Type of Accounting Change May Be Accounted for in Current