Under which of the following changes would no "catch-up" entry be required,because the remaining accounting value is allocated over the present and future periods?

Question

Quizplus · Accepted Answer

When there is a change in accounting estimate, the remaining accounting value is allocated over the present and future periods, which means no catch-up entry is required. This is because the change in the estimate typically arises from new information or improved methods, and it affects both current and future periods.

A correction of an error, a change to new tax laws, or a change in accounting principle all require a catch-up entry to adjust for the prior period's financial statements' impact.

Under Which of the Following Changes Would No "Catch-Up" Entry