Question

If a company changes the method it uses to compute the allowance for uncollectible accounts receivable...

If a company changes the method it uses to compute the allowance for uncollectible accounts receivable because more recent information has become available, how is this change in method accounted for?

Multiple Choice

All of the other answers are correct ways to account for the change

The change is reported in all future periods affected by the change

Previously issued financial statements are not adjusted by the change

The change is only reported in the current period in which the change is made

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Answer #1

Solution: All of the other answers are correct ways to account for the change

Explanation: When a company changes the method for the calculation of the allowance for uncollectible accounts receivable as more recent information has become available then the company have options to not adjust the previously issued financial statements, change to be reported only in the current period; change is reported in all future periods that have been impacted due to the change

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