Which of the following should be treated as a change in accounting policy? A. A change is made in the method of calculating the provision for uncollectible accounts receivable B. A change from cost model to fair value model in measuring investment property C. An entity engaging in construction contract for the first time needs on accounting policy to deal with this D. All of the choices qualify as a change in accounting policy

Which of the following should be treated as a change in accounting policy? A. A change is made in the method of calculating the provision for uncollectible accounts receivable B. A change from cost model to fair value model in measuring investment property C. An entity engaging in construction contract for the first time needs on accounting policy to deal with this D. All of the choices qualify as a change in accounting policy

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 1MC: Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process...

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Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
When the FASB issues a new generally accepted accounting principle, it may require companies to apply the new principle prospectively, or to account for the change by the retrospective adjustment method. Required: Why do you think that the FASB requires one of two different transition methods when a company adopts a newly required accounting principle? Do you agree with the use of two alternative methods?
Which of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
Which of the following statements regarding accounting change is correct? a. Change in depreciation method is accounted for as a change in accounting policy. b. Change in accounting estimate is accounted for in current and future periods. c. The categories of accounting changes are change in accounting estimate and correction of prior period error. d. A switch from the direct write-off method to the allowance method of accounting for bad debts is an example of change in accounting policy.
Which of the following is not classified as an accounting change by IFRS?(a) Change in accounting policy.(b) Change in accounting estimate.(c) Errors in fi nancial statements.(d) None of the above.
A change in accounting estimate is An adjustment of the carrying amount of an asset or liability, or related expense, resulting from reassessing the expected future benefits and obligations associated with that asset or liability. A change in the specific principles, bases, conventions, rules and practices applied b an entity in preparing and presenting financial statements. Omission from, and misstatement in an entity's financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that was available and could reasonably be expected to have been obtained and taken into account in preparing those statements. All of the above.
14. Which of the following statement is not correct as to why an entity must make adjusting entries? A. To prepare reliable income statement and statement of financial position B. To ensure that the revenue recognition and expense recognition principles are followed C. To prepare for closing and reversing entries D. To account for accruals and deferrals
What is meant by a change in accounting principle? Describe the possible accounting treatments for a mandatedchange in accounting principle
Discuss how a change in accounting policy is handled when it is impracticable to determine previous amounts.
Which of the following statement is correct regarding accounting changes that result in financial statements that are effect the statements of a different reporting entity? a.The financial statements of all prior periods presented are adjusted retrospectively. b.No restatements or adjustments are required if the changes involve the cost r equity methods of accounting for investments. c.Cumulative-effect adjustments should be reported as a separate item in the financial statements pertaining to the year of the change. d.No restatements or adjustments are required if the changes involve the cost or equity methods of accounting for investments.
Revenue is recognized for accounting purposes when a performance obligation is satisfied. In some situations, revenue is recognized over time as the fair values of assets and liabilities change. In other situations, however, accountants have developed guidelines for recognizing revenue at the point of sale. Explain in what situations it would be appropriate to recognize revenue over time. Ignore income taxes.