Question

A change in accounting principle that is implemented using the retrospective approach includes: a. Applying the new standard to the adoption period only and recording the cumulative adjustment for prior periods to the beginning balance of retained earnings b. Restating financial statements of all periods presented as if the new standard had been used in those periods c. Implementing the change in the current period only and not adjusting for the cumulative effects on prior periods d. Not accounting for the change in the current period or prior periods

Answer 1

Answer: The correct answer is "b. Restating financial statements of all periods presented as if the new standard had been used in those periods".

Explanation: A change in accounting principle that is implemented using the retrospective approach includes  Restating financial statements of all periods presented as if the new standard had been used in those periods

The retrospective approach in the implementation of a change in an accounting principle implies that it is applied and should be used eh all the financial statements even if they are of dates prior to the change of the principle.