Question

Tang Corporation has a change in accounting that requires Tang to restate the financial statements of all prior periods presented and disclose in the year of change the effect on net income and earnings per share data for all prior periods presented. This

change is most likely the result of a:
A. change in depreciation methods.
B. change in accounting estimate.
C. change in reporting entity.
D. change in estimated recoverable mineral reserves.

Answer 1

The change described is most likely a change in accounting estimate that requires the restatement of financial statements and disclosure of its impact on net income and earnings per share.

Step-by-step explanation:

The change described in the question, which necessitates the restatement of financial statements for prior periods and the disclosure of its impact on net income and earnings per share, is most likely a change in accounting estimate. A change in accounting estimate occurs when new information leads to a revision of an estimate used in the preparation of financial statements. In this case, Tang Corporation has revised an estimate that affects the financial statements and needs to disclose this change to provide accurate information to its stakeholders.