The modified retrospective approach requires:
A) a modification of prior years' financial statements.
B) a journal entry to adjust account balances in the beginning of the year of change.
C) both a modification of prior years' financial statements and a journal entry to adjust account balances in the beginning of the year of change.
D) neither a modification of prior years' financial statements nor a journal entry to adjust account balances in the beginning of the year of change.

Question

Quizplus · Accepted Answer

The cumulative effects of the change on prior years' net income is reported as an adjustment to the beginning balance of retained earnings in the current year with an offsetting amount to the balance sheet accounts affected by the change.

The Modified Retrospective Approach Requires