In situations where the change in accounting principle has both direct and indirect effects on prior years' income, GAAP states that a company recognize
A) only the direct effect retrospectively.
B) the direct effect and discuss the indirect effect in the notes to the financial statements.
C) only the indirect effect.
D) the direct effect prospectively.

Question

Quizplus · Accepted Answer

The Answer of In situations where the change in accounting principle has both direct and indirect effects on prior years' income, GAAP states that a company recognize
A) only the direct effect retrospectively.
B) the direct effect and discuss the indirect effect in the notes to the financial statements.
C) only the indirect effect.
D) the direct effect prospectively.

In Situations Where the Change in Accounting Principle Has Both