Asked by Story Kremin on May 22, 2024

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All of the following would be reported retrospectively by restating prior period's financial results except for a

A) change from the completed-contract method to the percentage-of-completion method for long-term construction contracts
B) correction of an error in previous periods
C) change to the full cost method (from the successful efforts method) for the extractive industry
D) change from the straight-line depreciation method to the sum-of-the-years'-digits method

Completed-Contract Method

An accounting method used where revenue and profit are deferred until a contract is completed, particularly useful in long-term projects.

Percentage-Of-Completion Method

An accounting method used to recognize revenue and expenses of long-term contracts proportionally to the amount of work completed.

Extractive Industry

Industries involved in the extraction of natural resources from the earth, such as mining, drilling for oil, or logging.

  • Comprehend various approaches to accounting for extensive construction agreements and the effects on financial statements.
  • Comprehend the principle of retrospective and prospective applications within the context of modifications in accounting.
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Verified Answer

MA
modupe adeniyiMay 27, 2024
Final Answer :
D
Explanation :
The change from straight-line to sum-of-the-years'-digits depreciation method would be reported prospectively, meaning only future financial statements would be affected. The other options would require restatement of prior period's financial results.