ACC325 Final

True

When it is impossible to determine whether a change in principle or change in estimate has occurred, the change is considered a change in estimate.

All of these are required.

Which of the following disclosures is required for a change from LIFO to FIFO?

Recomputation of current and future years' depreciation

Which of the following disclosures is required for a change from sum-of-the-years-digits to straight-line depreciation method?

A change in inventory valuation from average cost to FIFO.

Which of the following is accounted for as a change in accounting principle?

A change to a different method of depreciation for plant assets

Which of the following is not accounted for as a change in accounting principle?

False

A change in accounting principle is a change that occurs as the result of new information or additional experience.

False

Accounting errors include changes in estimates that occur because a company acquires more experience, or as it obtains additional information.

False

Adoption of a new principle in recognition of events that have occurred for the first time or that were previously immaterial is treated as an accounting change.

False

Counterbalancing errors are those errors that take longer than two periods to correct themselves.

errors that correct themselves in three years.

Counterbalancing errors do not include

True

Errors in financial statements result from mathematical mistakes or oversight or misuse of facts that existed when preparing the financial statements.

True

If an FASB standard creates a new principle, expresses preference for, or rejects a specific accounting principle, the change is considered clearly acceptable.

an accounting change that should be reported by restating the financial statements of all prior periods presented.

Presenting consolidated financial statements this year when statements of individual companies were presented last year is

second lowest $91,429.

On January 1, 2016, Knapp Corporation acquired machinery at a cost of $1,250,000. Knapp adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. At the beginning of 2019, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2019 would be

True

One of the disclosure requirements for a change in accounting principle is to show the cumulative effect of the change on retained earnings as of the beginning of the earliest period presented.

True

Retrospective application is considered impracticable if a company cannot determine the prior period effects using every reasonable effort to do so.

True

Retrospective application refers to the application of a different accounting principle to recast previously issued financial statements—as if the new principle had always been used.

False

When a company changes an accounting principle, it should report the change by reporting the cumulative effect of the change in the current year's income statement.

change in accounting estimate.

When a company decides to switch from the double-declining balance method to the straight-line method, this change should be handled as a

False

When companies make changes that result in different reporting entities, the change is reported prospectively.

A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate.

Which of the following statements is correct?

Change in accounting estimate

Which type of accounting change should always be accounted for in current and future periods?