Question

When a company changes from one acceptable accounting approach to another acceptable approach, the change must be reported as a retrospective adjustment

T

F

Answer 1

Answer : T ( true )

Explanation

1.Retrospective adjustment means implementation of new accounting policies for transactions or events

2.when you change the accounting standards or principles you must report that change as a retrospective  adjustment.

3. Retrospective adjustment will effect the presentation of financial statements for previous to current years

4.Generally accounting policies changed when it required by mandatory accounting standards

5. Examples of change of accounting policies straight line Depreciation method to double declining balance method and FIFO to LIFO etc