Question & Answer: Which accounting change should be applied prospectively? A. Presentation of statements of i…..

Which accounting change should be applied prospectively? A. Presentation of statements of individual entities to their inclusion in consolidated statements. B. Straight-line method of depreciation for previously recorded assets to the double-declining-balance method. C. Completed-contract method of accounting for long-term construction-type contracts to the percentage-of-completion method. D. Cash basis of accounting for vacation pay to the accrual basis.

Expert Answer

A. Presentation of statements of individual entities to their inclusion in consolidated statements.-Applied retrospectively

B. Straight-line method of depreciation for previously recorded assets to the double-declining-balance method.-Applied retrospectively

C. Completed-contract method of accounting for long-term construction-type contracts to the percentage-of-completion method.-Applied prospectively

D. Cash basis of accounting for vacation pay to the accrual basis.-Applied retrospectively.

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