Question

All of the following statements regarding changes in accounting principles are true except which of the following?

Most changes in accounting principles are only reported in current periods when the principle change takes place.

Changes in accounting principles are allowed when new principles are preferable to old ones.

Most changes in accounting principles are retroactively reported.

Consistency is one of the biggest concerns when a change in accounting principle is undertaken

Which of the following items appears on the income statement before income before irregular items?

Other comprehensive income.

Extraordinary items.

Income tax expense.

Discontinued operations. All of the following are reported on the income statement net of tax except irregular items. other comprehensive income items. income from operations. extraordinary items.

Answer 1

Solution 1:

All of the following statements regarding changes in accounting principles are true except "Most changes in accounting principles are only reported in current periods when the principle change takes place"

Hence first option is correct.

Solution 2:

Income tax expense appears on the income statement before income before irregular items

Hence 3rd option is correct.

Solution 3:

All of the following are reported on the income statement net of tax except "income from operations"

hence 3rd option is correct.