Accrual Accounting Requires Frequent, Ongoing Changes in Estimates

Multiple Choice

Accrual accounting requires frequent, ongoing changes in estimates.Which of the following is/are not true?

A) As time passes and conditions change, new information becomes available that causes management to change the estimates required to apply accounting principles.
B) Firms do not recalculate revenues and expenses of previous periods to incorporate new information involving estimates.
C) Changes in estimates do not always relate to recurring accrual accounting measurements.
D) Examples of changes in estimates include the amount of uncollectible accounts and the useful lives of depreciable assets.
E) Firms report the income effect of these items in the retained earnings as a direct adjustment.