Question: The cumulative effect of a change in accounting principle should be recorded as an adjustment to retained earnings, when the change is:
- Completed-contract method of accounting for long-term construction-type contracts to the percentage-of-completion method
- Cash basis of accounting for vacation pay to the accrual basis.
- Longer useful life of equipment to shorter useful life.
- Straight-line method of depreciation for previously recorded assets to the double-declining-balance method.