Which of the following would be accounted for as a change in accounting principle?
Q: What need has the changing definition of accounting fulfilled?
A: Accounting is described as process in which the transactions or events pertaining to the firm are…
Q: Changes in accounting policies are always accounted for as prospective in application. TRUE or…
A: Accounting policies means rules, guidelines and procedures that are used for the preparation of…
Q: Discuss briefly the three approaches that have been suggested for reporting changes in accounting…
A: Accounting changes are the alterations made to the accounting methods, accounting estimates,…
Q: Why and when the generally accepted accounting principles were established?
A: Generally accepted accounting principle- It contains the set of rules, regulations and criteria for…
Q: Define a change in estimate and provide an illustration. When is a change in accounting estimate…
A:
Q: There are two basic accounting approaches to reporting accounting changes. What are they?
A: Accounting changes: Accounting changes are the alternations made to the accounting methods,…
Q: If the accounting information is not clearly presented, which of the qualitative characteristic of…
A: Introduction Information in the books of accounts need some qualities, which are to be fulfilled in…
Q: A change in accounting policy requires what type of adjustment to the financial statements? O…
A: A change in accounting policy requires what kind of adjustment to the financial statements? This…
Q: Discuss briefly the three approaches that have been suggested for reporting change in accounting…
A: For reporting amendments in accounting principles, the three approaches proposed are: Currently…
Q: Which of the following is true regarding whether IFRS specifically addresses the accounting and…
A: IFRS:
Q: We report most changes in accounting principle retrospectively. Describe this general way of…
A: Meaning:
Q: What is the matching principle of accounting?
A: Financial accounting standards board (FASB): This is the organization which creates, develops, and…
Q: Explain the changes in accounting principles.
A: Change in accounting principle is one of the type of accounting change it may undergoes during…
Q: Which of the following does NOT define accounting? Concluding Recording Summarising Classifying
A: Accounting is the art of Recording, Summarising and Classifying the financial transaction or events.
Q: What is meant by a change in accounting principle? Describe the accounting treatment for a voluntary…
A:
Q: Discuss the types of accounting changes and the accounting for changes in accounting principles.
A: Accounting changes: When a company requires to sacrifice the consistent accounting methods and…
Q: How does a company compute the effect of such changes in accounting principle?
A: Wee first needs to understand the meaning of change of accounting principal. A change in accounting…
Q: Question 2 Considering whether to use historical cost or fair value relates to which of the…
A: Accounting Policies refer to specific accounting principles and methods of applying these principles…
Q: Describe changes in accounting principles.
A: A change in an accounting principle is a change in a method used, such as using a different…
Q: What are the primary advantages of having a Codification of generally accepted accounting…
A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…
Q: What are the common errors in accounting?
A:
Q: Which type of accounting change should always be accounted for in current and future periods?…
A: Change in accounting policy and reporting entity should not be accounted in current and future…
Q: Why does accounting rely on inexact or approximate measures?
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Q: What are the implications of a revised accounting estimate
A: The implications of a revised accounting estimate will be explained :
Q: Compare and contrast the sorts of accounting changes and the methods used to account for them
A: The sorts of accounting changes and the methods will be explained:
Q: How is a change in accounting estimate applied?
A: A change in accounting estimate is an adjustment of the carrying amount of an asset or liability, or…
Q: How do you maintain accounting accuracy?
A: Maintaining accuracy in the accounting records is an essential requirement for every entity involved…
Q: Differentiate among the three types of accounting changes and distinguish among the retrospective,…
A: The three types of accounting changes are: Change in accounting principle Change in accounting…
Q: How is a change from a non-GAAP accounting method to a GAAP method recorded?
A: Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to create…
Q: May you tell me where I can get reliable IFRS relevant to accounting changes
A: This question explains about reliable IFRS relevant to accounting changes
Q: What is the desired benefit from revising an accounting standard?
A: Financial Accounting Standards Board: It is commonly known as FASB. It is a private, non-profit…
Q: esult of the accounting change?
A:
Q: Identify and describe the approach the FASB requires for reporting changes in accounting principles.
A: Accounting method: A set of rules and guidelines through which the organization records and analyzes…
Q: Why is the evidence provided by source documents important to accounting?
A: Source Document Source document are refer as the original record which contains the detail…
Q: Would a change from LIFO to FIFO be a change in accounting principle or a change of estimate?How…
A: Describe whether the change from LIFO to FIFO would be a change in accounting principle or a change…
Q: Which of the following is not one of the approaches for reporting accounting changes? The change…
A: accounting change is a change that takes place in the accounting principles, accounting estimate or…
Q: Where can authoritative IFRS related to accounting changes be found?
A: Accounting changes include the change in methods or ways of accounting by the company, which will…
Q: Distinguish between termporary differences and permanent differences in Accounting? Provide an…
A: Generally, the reports and financial statements are to be prepared as per the applicable accounting…
Q: Which is not classified as an accounting change? A. Change in accounting policy B. Change in…
A:
Q: Generally accepted methods of accounting for a change in accounting principle include
A: When a change in accounting principle takes place then the concerned company will have to ensure…
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- For each of the following independent scenarios, determine if each event is an accounting change, error, or neither. For each accounting change or error determine the method that should be used to account for the change or error in the current year financial statements: retrospective adjustment, prospective, or prior period adjustment. Change from LIFO to FIFO Inventory Method. - NEITHER Change in useful life of equipment from 10 years to 7 years. Accounting Error Change in depreciation method from Double Declining Balance to Straight Line. Write-down of inventory due to obsolescence. Settlement of lawsuit and receipt of damages from 5 years prior. Write-off of patent due to competing product. Prior year costs were recorded as expenses instead of Property, Plant and Equipment. Change in Allowance for Uncollectible Accounts due to increase in unpaid Accounts Receivable, changes estimate from 4% of credit sales to 6%.Identify if the following changes are an accounting policy change (P), an accounting estimate change (AE), or an error (E). Item • The useful life of a piece of equipment was revised from five years to six years. • An accrued litigation liability was adjusted upwards once the lawsuit was concluded. • An item was missed in the year-end inventory count. • The method used to depreciate a factory machine was changed from straight-line to declining balance when it was determined that this better reflected the pattern of use. • A company adopted the new IFRS for revenue recognition. • The accrued pension liability was adjusted downwards as the company's actuary had not included one employee group when estimating the remaining service life. • The allowance for doubtful accounts was adjusted upwards due to current economic conditions. • The allowance for doubtful accounts was adjusted downwards because the previous estimate was based on an aged trial balance that classified some…Classify each of the following accounting practices as conservative or aggressive. 1. Increase the allowance for uncollectible accounts. 2. When costs are rising, change from LIFO to FIFO. 3. Change from declining-balance to straight-line depreciation in the second year of an asset depreciated over 20 years.
- Answer the following question: Which of the following is an example of a change in accounting policy? a) Switching from the double declining balance to the straight-line method of depreciation b) Adjusting the financial statements for an inventory count omission which occurred 2 years previously. c) Switching from a salvage value of $10,000 to a salvage value of $4,000 in the 3rd year of the equipment’s 8-year life. d) Using 5% for the allowance for bad debts instead of 3% because of the increased possibility of bankruptcy by customers. e) None of the other answers are correct.Entity A is preparing its oparing its December 31, 20x1 financial statements, Provide the year-end adjusting entries for the following: Required (a) Entity A acquired a machine on November 30, 20x1 for $420,000. The machine has an estimated useful life of 8 years, Required (b)Entity A has total accounts receivable of $890,000 as of December 31, 20x1. Of that amount, P45,000 were estimated to be doubtful of collection.Change in accounting policy does not include (a) Change in useful life from 10 years to 7 years. (b) Change of method of valuation of inventory from FIFO to weighted-average. (c) Change of method of valuation of inventory from weighted-average to FIFO. (d) Change from the practice (convention) of paying as Christmas bonus one month’s salary to staff before the end of the year to the new practice of paying one-half month’s salary only.
- (Change in Estimate) Mike Crane is an audit senior of a large public accounting firm who has just been assigned to the Frost Corporation’s annual audit engagement. Frost has been a client of Crane’s firm for many years. Frost is a fastgrowing business in the commercial construction industry. In reviewing the fixed asset ledger, Crane discovered a series of unusual accounting changes, in which the useful lives of assets, depreciated using the straight-line method, were substantially lowered near the midpoint of the original estimate. For example, the useful life of one dump truck was changed from 10 to 6 years during its fifth year of service. Upon further investigation, Mike was told by Kevin James, Frost’s accounting manager, “I don’t really see your problem. After all, it’s perfectly legal to change an accounting estimate. Besides, our CEO likes to see big earnings!”InstructionsAnswer the following questions.(a) What are the ethical issues concerning Frost’s practice of changing the…Depreciation for a prior period was incorrectly understated by $950,000. The error was discovered in the current year. what section of the income statement or retained earnings statement these items should be classified. Provide a brief rationale for your position.When converting to IFRS, a company must:(a) recast previously issued financial statements in accordance with IFRS.(b) use GAAP in the reporting period but subsequently use IFRS.(c) prepare at least three years of comparative statements.(d) use GAAP in the transition year but IFRS in the reporting year.
- identify whether it is treated as a prior period adjustment or change in accounting estimate. Upon reviewing customer contracts, the company realizes it mistakenly reported $150,000 in revenue instead of the actual amount earned of $15,000. This mistake occurred two years ago and had a material effect on financial statements.Norse Manufacturing Inc. prepares an annual single, continuous statement of income and comprehensive income. The following situations occurred during the company’s 2024 fiscal year: Restructuring costs were incurred due to the closing of a factory. Investments were sold, and a loss was recognized. A positive foreign currency translation adjustment was recognized. Interest expense was incurred. A division was sold that qualifies as a separate component of the entity according to GAAP. Obsolete inventory was written off. The controller discovered an error in the calculation of 2023’s patent amortization expense. Required: For each situation, identify the appropriate reporting treatment from the list below (consider each event to be material): As a component of operating income As a nonoperating income item (other income or expense) As a discontinued operation As an other comprehensive income item As an adjustment to retained earnings Identify the situations that would be reported…Ginger Ltd is completing its financial statements for the year ended 30 June 2020. In undertaking the accounting work, it becomes apparent that a vehicle that was thought to be on hand at the end of the previous financial year had actually been destroyed in a storm on 21 May 2019. The vehicle had a cost of $64,000 and accumulated depreciation of $16,000. Required: Provide the accounting entries to account for the discover of this prior period error in accordance with IAS 8 / AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. Ignore the tax effect and assume that the value of the vehicle is material to Ginger Ltd. (narrations are not required). ANSWER HERE: Date Account Name Debit Credit
