BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem

A change in the expected service life of an asset arising because additional information has been obtained is:

  1. a. an accounting change that should be reported by restating the financial statements of all prior periods represented
  2. b. an accounting change that should be reported in the period of change and future periods if the change affects both
  3. c. a correction of an error
  4. d. not an accounting change

To determine

Find the correct option, the option which explains the correct type of accounting change.

Explanation

Accounting changes: When a company requires to sacrifice the consistent accounting methods and procedures, to enhance the usefulness and relevance of the accounting information, those changes are referred to as accounting changes. Such inevitable accounting changes decrease the comparability and consistency of accounting information. The reasons for accounting changes could be new methods introduced by FASB (Financial Accounting Standards Board), changes in accounting principles, and changes in accounting estimates. The following are the three types of accounting changes:

  • Change in an accounting principle
  • Change in an accounting estimate
  • Change in a reporting entity

Justification for correct answer: When a company changes or revises an estimate due to additional or new experience, such a change is referred to as change in accounting estimate...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is packet switching?

Accounting Information Systems

What is the difference between contribution margin and segment margin?

Managerial Accounting: The Cornerstone of Business Decision-Making

Explain how absolute advantage and comparative advantage differ.

Principles of Microeconomics (MindTap Course List)

List and describe four determinants of productivity.

Principles of Macroeconomics (MindTap Course List)

TIE RATIO AEI Incorporated has 5 billion in assets, and its tax rate is 40%. Its basic earning power (BEP) rati...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

List the steps in the closing procedure in the correct order.

College Accounting (Book Only): A Career Approach

What factors distinguish DSS from EIS?

Pkg Acc Infor Systems MS VISIO CD