1. Gore Inc. recorded a liability in 2016 for a probable litigation loss of $4 million. Ultimately, a $5 million loss was incurred in 2017.
   1. Gore has made a change in accounting principle, requiring retrospective treatment.
   2. Gore has made an accounting error and needs to revise the 2016 financial statements
   3. Gore has made a change in accounting estimate and will record an additional $1 loss in 2017.
   4. Gore will only have to pay $4 million as that was the original estimate

2. When an accounting change is reported under the retrospective approach, prior years financial statements are
   1. Not revised
   2. Revised to reflect the use of the new principle
   3. Revised only if the company files an amended tax return
   4. Revised only if the change affects sales revenue

3. Which of the following is not usually accounted for retrospectively?
   1. A change in the composition of firms reporting on a consolidated basis
   2. A change from FIFO to LIFO
   3. A change from LIFO to FIFO
   4. A correction of an error

4. Which of the following is accounted for prospectively?
   1. A change in the reporting entity
   2. A change in an estimate
   3. A change in accounting principle
   4. Correction of an error