Solved

For Each Change or Error Indicate How It Would Be

Question 130

Matching

For each change or error indicate how it would be accounted for

Premises:
Changed remaining service life from 8 years to 10 years
Change from an unacceptable accounting method to an acceptable
Received money won in a law suit
Inventory write down due to obsolescence
Change in rate used to calculate warranty costs
Change from FIFO to average costs inventory method
Discovered errors in unrecorded expenses from a prior period
Purchased another company which now requires the financial statements to be consolidated.
Responses:
Retrospective adjustment
Prospective adjustment
None of the choices

Correct Answer:

Changed remaining service life from 8 years to 10 years
Change from an unacceptable accounting method to an acceptable
Received money won in a law suit
Inventory write down due to obsolescence
Change in rate used to calculate warranty costs
Change from FIFO to average costs inventory method
Discovered errors in unrecorded expenses from a prior period
Purchased another company which now requires the financial statements to be consolidated.
Related Questions

Q82: Most errors are discovered automatically through proper

Q83: Most changes in accounting principles are accounted

Q120: What must be disclosed when making a

Q121: What is the GAAP requirement of accounting

Q122: Current GAAP defines three types of changes:
a.

Q123: Explain the direct and indirect effects of

Q124: What is a change in reporting entity

Q125: What differences exist between U.S. GAAP and

Q126: What are the 4 steps involved in

Q129: What is the difference between counterbalancing errors

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents