Asked by Andres Velazquez on Apr 25, 2024
A change in an accounting estimate is:
A) Reflected in past financial statements.
B) Reflected in future financial statements and also requires modification of past statements.
C) Reflected in current and future years' financial statements,not in prior statements.
D) Not allowed under current accounting rules.
E) Considered an error in the financial statements.
Accounting Estimate
An approximation of a financial statement element, item, or account in the absence of exact data, often involving judgment or assumptions.
Financial Statements
Formal records of the financial activities and position of a business, individual, or other entity.
- Identify and apply changes in accounting estimates and their effects on financial statements.
Learning Objectives
- Identify and apply changes in accounting estimates and their effects on financial statements.