An entry to record a change in accounting principle will typically require an adjustment to the firm's retained earnings balance to reflect the cumulative effect of the change in accounting principle on all prior periods' reported net income.

Question

Quizplus · Accepted Answer

When a change in accounting principle occurs, the cumulative effect of the change on all prior periods' reported net income is typically included as an adjustment to the firm's retained earnings balance.

An Entry to Record a Change in Accounting Principle Will