True or False Prior years' financial statements are not restated when the prospective approach is used.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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True or False
Prior years' financial statements are not restated when the prospective approach is used.
A change to the FIFO method of valuing inventory requires use of the retrospective method.
Error corrections require restatement of all the affected prior year financial statements reported in
comparative financial statements.
No changes in accounting principle are reported using the retrospective approach.
All changes in estimate are accounted for retrospectively.
Transcribed Image Text:True or False Prior years' financial statements are not restated when the prospective approach is used. A change to the FIFO method of valuing inventory requires use of the retrospective method. Error corrections require restatement of all the affected prior year financial statements reported in comparative financial statements. No changes in accounting principle are reported using the retrospective approach. All changes in estimate are accounted for retrospectively.
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