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A Cumulative Effect of a Change in an Accounting Principle

Question 111

Multiple Choice

A cumulative effect of a change in an accounting principle is measured as

A) the difference between prior periods' net income under the old method and what would have been reported if the new method had been used in the prior years.
B) the after-tax difference between prior periods' net income under the old method and what would have been reported if the new method had been used in the prior years.
C) the difference between prior periods' net income and current net income under the old method and what would have been reported if the new method had been used in the prior years and the current year.
D) the after-tax difference between prior periods' net income and current net income under the old method and what would have been reported if the new method had been used in the prior years and the current year.

Correct Answer: