Change in an accounting principle is accounted for
A) prospectively.
B) by a prior period adjustment.
C) by a retrospective application of a new accounting principle.
D) by constructive application of a new accounting principle.

Question

Quizplus · Accepted Answer

Change in an accounting principle is typically accounted for by a retrospective application of the new accounting principle to all prior periods, unless it is impracticable to do so. This approach ensures that the financial statements present a consistent basis of accounting across periods, allowing for comparability.

Change in an Accounting Principle Is Accounted for