A change in the company's policy on defining cash equivalents should be reported as a cumulative effect adjustment.

Name: A change in the company's policy on defining cash equivalents should be reported as a cumulative effect adjustment.
Brand: Quizplus
Rating: 4.7 (48 reviews)

Question

Quizplus · Accepted Answer

Changes in accounting policies are applied retrospectively, not as a cumulative effect adjustment in the current period, unless it is impracticable to determine the period-specific effects or the cumulative effect of the change.

A Change in the Company's Policy on Defining Cash Equivalents