Question

Current GAAP requires a company to account for a change in accounting estimate that impacts multiple periods during the period of change. the period of change and past periods. the period of change, past periods, and future periods. the period of change and future periods.

Answer 1

Current GAAP requires a company to account for a change in accounting estimate that impacts multiple periods

during the period of change.

Step-by-step explanation:

Changes in accounting estimates mostly relate to depreciation and bad-debt expenses. While changes in accounting principles, mainly involving inventory valuation and revenue recognition are required to be done retroactively, with affected financial statements restated, changes in estimates are not required to be applied retroactively. No cumulative effect or retrospective adjustment is required in the year of change.