predominant reason for using the retroactive approach to reportcertain changes i

Question

predominant reason for using the retroactive approach to reportcertain changes in accounting principle is: 1) The effect of thechanges usually is quite large. 2) The Internal RevenueCode requires it. 3) The cumulative effectcannot be calculated. 4) The tax liability isreduced The effect of thechanges usually is quite large. The Internal RevenueCode requires it. The cumulative effectcannot be calculated. The tax liability isreduced 1) The effect of thechanges usually is quite large. 2) The Internal RevenueCode requires it. 3) The cumulative effectcannot be calculated. 4) The tax liability isreduced

Explanation / Answer

Predominant reason for using the retroactive approach to reportcertain changes in accounting principle is:

3) The cumulative effect cannot be calculated.

If retroactive approach is not used, the cumulative effectcannot be calculated.

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