acct 253 ch 22

  1. A change that occurs as the result of new information or as additional experience is acquired is a



    C. change in accounting estimate
  2. All of the following are examples of a change in accounting principle except a change from



    A. expensing certain expenditures that were immaterial to deferring and amortizing them because they have become material
  3. A switch from the cash basis of accounting to the accrual basis is considered a



    C. correction of an error
  4. Changes in accounting principle are generally accounting for



    A. retrospectively
  5. The cumulative effect of a change in accounting principle is reported



    A. on the retained earnings statement as an adjustment to the beginning balance on the earliest year presented
  6. All of the following situations require the restatement of prior period financial statements except a change



    B. to the LIFO inventory method from another method
  7. Corrections of errors from prior periods are reported



    A. as an adjustment to the current year's beginning retained earnings
  8. The cumulative effect of an accounting change is not computed for a change



    B. to the LIFO method from the FIFO method
  9. Changes in estimates must be accounted for



    B. prospectively
  10. Which of the following statements related to changes in estimates is not correct?



    B. pro forma amounts for prior periods are reported
  11. A change in reporting entity is accounted for



    C. retrospectively
  12. All of the following are examples of accounting errors except a



    B. all of the options are accounting errors
  13. Corrections of error must be accounted for



    C. as prior period adjustments
  14. Which of the following is not a reason why companies prefer certain accounting methods?



    C. asset structure
  15. All of the following involve counterbalancing errors except the



    B. failure to record depreciation
  16. Accounting changes are often made and the monetary impact is reflected in the financial statements of a company even though, in theory, this may be a violation of the accounting concept of



    A. consistency
  17. Which of the following is not treated as a change in accounting principle?



    A. a change to a different method of depreciation for plant assets
  18. Which of the following is not a retrospective type accounting change?



    A. sum of the years digits method to the straight line method
  19. Which of he following is accounted for as a change in accounting principle?



    B. a change in inventory valuation from average cost to FIFO
  20. Which of the following disclosures is required for a change from sum of years digits to straight line?



    C. re-computation of current and future years' depreciation
  21. A company changes from percentage of completion to completed contract, which is the method used for tax purposes. The entry to record this change should include a



    B. debit to Retained Earnings in the amount of the difference on prior years, net of tax
  22. Which of te following disclosures is required for a change from LIFO to FIFO?



    B. all of these are required
  23. Stone Company changed its method of pricing inventories from FIFO to LIFO. What type of accounting change does this represent?



    • C. a change in accounting principle for which the financial statements
    • for prior periods included for comparative purposes should be presented
    • as previously reported
  24. Which type of accounting change should always be accounted for in current and future periods?



    D. change in accounting estimate
  25. Which of the following is (are) the proper time period(s) to record the effects of a change in accounting estimate?



    B. current period and prospectively
  26. When a company decides to switch from the double-declining balance method to the straight line method, this change should be handled as a



    D. change in accounting estimate
  27. The estimated life of a building that has been depreciated 30 years of an originally estimated life of 50 years has been revised to a remaining life of 10 years. Based on this information, the accountant should



    B. depreciate the remaining book value over the remaining life of the asset
  28. Which of the following statements is correct?



    • A. 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
  29. Which of the following describes a change in reporting entity?



    C. changing the companies included in combined financial statements
  30. An example of a correction of an error in previously issued financial statements is a change



    C. from the cash basis of accounting to the accrual basis of accounting
Author
wsrdpc
ID
31856
Card Set
acct 253 ch 22
Description
acct 253 ch 22
Updated