Choice "A" is correct, as of January 1, Year 1, the beginning of the year.Rule: The cumulative effect of a change in accounting principle equals the difference between retained earnings at the beginning of period of the change and what retained earnings would have been if the change was applied to all affected prior periods, assuming comparative financial statements are not presented. Beginning retained earnings of the earliest year presented is adjusted for the cumulative effect of the change.
Choice "d" is incorrect. The cumulative effect of the change is not determined as of the date the decision is made.
Choices "b" and "c" are incorrect. The cumulative effect of the change is not determined by a weighted average.