Question

How would a company report a change in an accounting principle made on the last day of the third quarter?

Answer 1

If a company changes an accounting principle on the last day of the 3rd quarter they need to apply a retrospective application to all pre-change interim periods reported.

What is accounting?

• Accounting is the process of documenting a business's financial transactions. These transactions are compiled, examined, and reported to oversight organizations, regulatory bodies, and tax collection organizations as part of the accounting process.
• A company's operations, financial condition, and cash flows are summarized in the financial statements that are used in accounting. They provide a succinct summary of financial transactions across an accounting period.
• One of the most important aspects of practically every firm is accounting. Small businesses may have a bookkeeper or accountant manage it, whereas larger corporations may have vast finance departments with many people.

Management can make wise business decisions thanks to the information produced by many streams of accounting, including cost accounting and managerial accounting.

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