1.

A change in accounting principle is a change that occurs as the result of new information
or additional experience. F

2. Errors in financial statements result from mathematical mistakes or oversight or misuse

of facts that existed when preparing the financial statements. T

3. Adoption of a new principle in recognition of events that have occurred for the first time
or that were previously immaterial is treated as an accounting change. F

4. When a company changes an accounting principle, it should report the change by

reporting the cumulative effect of the change in the current year’s income statement. F

5. One of the disclosure requirements for a change in accounting principle is to show the
cumulative effect of the change on retained earnings as of the beginning of the earliest period
presented. T

6. Retrospective application is considered impracticable if a company cannot determine

the prior period effects using every reasonable effort to do so. T

7. Companies report changes in accounting estimates retrospectively. F

8. Companies account for a change in depreciation methods as a change in accounting

principle. F

9. Companies record corrections of errors from prior periods as an adjustment to the

beginning balance of retained earnings in the current period. T

10. Balance sheet errors affect only the presentation of an asset or liability account.