Prior years' financial statements are restated under the:
A)Current approach.
B)Prospective approach.
C)Retrospective approach.
D)None of these answer choices is correct.

Question

Quizplus · Accepted Answer

Restating prior years' financial statements involves adjusting the previously reported numbers to reflect changes in accounting policies, corrections of errors, or other material adjustments. The retrospective approach requires restating all prior period financial statements as if the new accounting policy had always been in effect, providing a consistent view of the financial statements over time. Hence, option C, retrospective approach, is the appropriate choice for restating prior years' financial statements.

Prior Years' Financial Statements Are Restated Under The