Question

A change in accounting principle required that the cumulative effect of the change for proper periods be shown as an adjustment to:

A. Beginning retained earnings of the earliest period presented.
B. Net income of the period in which the change occurred
C. Comprehensive income for the earliest period presented.

Answer 1

A change in accounting principle requires that the cumulative effect of the change be shown as an adjustment to beginning retained earnings of the earliest period presented.

Step-by-step explanation:

The correct answer is A. Beginning retained earnings of the earliest period presented. When there is a change in accounting principle, the cumulative effect of the change should be shown as an adjustment to the beginning retained earnings of the earliest period presented. This ensures that the financial statements accurately reflect the impact of the accounting principle change on the company's retained earnings. It is important to disclose this adjustment to provide transparency and comparability in financial reporting.

Answer 2

A change in accounting principle requires the adjustment to be shown as an adjustment to beginning retained earnings of the earliest period presented.

Step-by-step explanation:

A change in accounting principle requires that the cumulative effect of the change for proper periods be shown as an adjustment to Beginning retained earnings of the earliest period presented. This means that the adjustment is made to the opening balance of retained earnings in the earliest period affected by the change. By doing so, the impact of the accounting principle change is reflected in the financial statements from the beginning of the earliest period.