Intermediate Accounting II Final

Which is accounted for as a change in accounting principle for a publicly traded corporation

A change from FIFO to LIFO

Which is accounted for prospectively

Change in the % used to determine warranty expense

An item that should be reported as a prior period adjustment is the:

Correction of an error in depreciation from last year.

A change in reporting entity requires note disclosures in all subsequent financial statements prepared for the new entity.

FALSE

Which is true regarding correcting errors in previously issued financial statements prepared in accordance with IFRS

The error can be reported in the current period if its not considered practicable to report it retrospectively.

With regard to interest and dividend inflows and outflows, the international standard for cash flow statements:

allows companies to report cash inflows from interest and dividends as either operating or investing cash flows

A change that uses the prospective approach is accounted for by:

implementing it in the current year

copyrights are recorded

prospectively

When calculating effect of municipal bond interest, do not use

tax rate %

COGS as reported in the income statement will be less than cash paid to suppliers if:

the decrease in accounts payable is equal to the increase in inventory during the period.

C. Goode Eyeglasses overstated its inventory by $30,000 at the end of 2021. In 2022, the discovery of this error, before adjusting or closing entries, would require:

the effect was an overstatement of NI and RE. The beginning inv of 2022 is overstated and COGS is overstated. In 2022, RE would be debited for $30,000 and COGS would be credited for $30,000.