Changes in Accounting Principle: Definition & Impact

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question 1 of 3

A change in accounting principle would be allowed for which of these situations?

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1. Which of these must be done when accounting principles are changed ?

2. Which financial statement(s) will be affected by a change in accounting principle from straight line to accelerated depreciation methods?

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About This Quiz & Worksheet

You'll find multiple-choice questions included on our engaging quiz and worksheet designed to assess your knowledge of changes in accounting principle. Working through this quiz means you'll need to know the situations in which a change in accounting principle is allowed and what must be done when accounting principles are changed.

Quiz & Worksheet Goals

Take our quiz at any time to see if you know:

  • The situations where a change in accounting principle is allowed
  • What must be done when accounting principles are changed
  • Which financial statement(s) are affected by a change in accounting principle from straight line to accelerated depreciation methods
  • What FASB rules state about a company changing from LIFO to FIFO inventory valuation and their financials were destroyed
  • Which financial statements must be restated when a change in accounting principle takes place

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about the financial statement(s) affected by a change in accounting principle from straight line to accelerated depreciation methods
  • Information recall - access the knowledge you've gained regarding which financial statements must be restated when a change in accounting principle has happened
  • Reading comprehension - ensure that you draw the most important information from the related lesson on changes in accounting principle

Additional Learning

Study this topic in greater depth by accessing this short lesson Changes in Accounting Principle: Definition & Impact at any time on your mobile device or computer. Once you finish this lesson, you should be able to:

  • Identify GAAP and understand what it allows
  • Outline the areas where change in accounting principle is allowed
  • Explain what happens to the cost of sales when the accounting principle is changed
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