The underlying principle of the retrospective application method is to
A) apply changes currently and in the future.
B) present all comparative periods as if the new accounting policy had always been used.
C) make assumptions about what management's intent was in prior years.
D) disclose all mistakes made in the past.

Question

Quizplus · Accepted Answer

Retrospective application requires presenting comparative financial statements as if the new accounting policy had always been used. This means that the changes are applied to prior periods' financial statements to reflect the impact on the financial position, performance, and cash flows of the organization. It helps to provide a more accurate representation of the financial statements and facilitates better decision-making.

The Underlying Principle of the Retrospective Application Method Is to