A change from one acceptable accounting method to another is reported
A) on the statement of retained earnings, as a correction to the beginning balance
B) on the income statement, below income from continuing operations
C) on the income statement, above income tax expense
D) through a retroactive restatement of prior period earnings

Question

Quizplus · Accepted Answer

A change in accounting method is reported through a retroactive restatement of prior period earnings. This is done to ensure that the financial statements are comparable to prior periods and to provide users with a clear understanding of the impact of the change. The other options listed are not appropriate for reporting a change in accounting method.

A Change from One Acceptable Accounting Method to Another Is