FINANCIAL ACCOUNTING W/ACCESS >CI<
2nd Edition
ISBN: 9781259999024
Author: SPICELAND
Publisher: MCG CUSTOM
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Textbook Question
Chapter 12, Problem 12.14BE
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
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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.
) Which one of these changes would be classified as ‘a change in accounting policy’ as determinedby HKAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’?A Increased the allowance for irrecoverable receivables from 5% to 10% of outstanding debtsB Changed the method of valuing inventory from FIFO to average costC Changed the depreciation of plant and equipment from straight-line depreciation toreducing balance depreciationD Changed the useful economic life of its motor vehicles from six years to four years
Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year).
A business depreciates a building with a book value of $12,000, using straight-line depreciation, no salvage value, and a remaining useful life of six years.
An organization has a line of credit with a supplier. The company purchases $35,500 worth of inventory on credit. Terms of purchase are 3/20, n/60.
An employee earns $1,000 in pay and the employer withholds $46 for federal income tax.
A customer pays $4,000 in advance for legal services. The lawyer has previously recognized 30% of the services as revenue. The remainder is outstanding.
Chapter 12 Solutions
FINANCIAL ACCOUNTING W/ACCESS >CI<
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - 5.In performing horizontal analysis, why is it...Ch. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16RQCh. 12 - Prob. 17RQCh. 12 - Prob. 18RQCh. 12 - Prob. 19RQCh. 12 - Prob. 20RQCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Universal Sports Supply began the year with an...Ch. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Classify each of the following accounting...Ch. 12 - Classify each of the following accepted accounting...Ch. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Refer to the information for Adrian Express in...Ch. 12 - Prob. 12.7ECh. 12 - Calculate profitability ratios (LO124) Refer to...Ch. 12 - Prob. 12.9ECh. 12 - The income statement for Stretch-Tape Corporation...Ch. 12 - Prob. 12.11ECh. 12 - LeBrons Bookstores has two divisions, books and...Ch. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Distinguish between conservative and aggressive...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.4APCh. 12 - Prob. 12.5APCh. 12 - Prob. 12.6APCh. 12 - Game-On Sports operates in two distinct segments:...Ch. 12 - Prob. 12.2BPCh. 12 - Prob. 12.3BPCh. 12 - Prob. 12.4BPCh. 12 - Prob. 12.5BPCh. 12 - Prob. 12.6BPCh. 12 - Prob. 12.1APCPCh. 12 - Prob. 12.2APFACh. 12 - Prob. 12.3APFACh. 12 - Prob. 12.4APCACh. 12 - Prob. 12.5APECh. 12 - Prob. 12.7APWCCh. 12 - Prob. 12.8APEM
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