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Anexample of a correction of an error in previously issued financialstatements is a change

a) from the FIFO method of inventory valuation to the LIFOmethod
b) in the service life of plant assets, based on changes inthe economic environment
c) from the cash basis of accounting to the accrual basis ofaccounting
d) in the tax assessment related to a prior period

What is the correct answer ??

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Jamar Ferry
Jamar FerryLv2
28 Sep 2019
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Related questions

1. Indicate how the following items are recorded in the accounting records in the current year of Coronet Co. (a) Impairment of goodwill. (b) A change in depreciating plant assets from acceler- ated to the straight-line method. (c) Large write-off of inventories because of obsolescence. (d) Change from the cash basis to accrual basis of accounting. (e) Change from LIFO to FIFO method for inventory valuation purposes. (f) Change in the estimate of service lives for plant assets.

1. (TCO E) Which of the following isnot treated as a change in accounting principle? (Points :5)

A change fromcompleted-contract to percentage-of-completion
A change from LIFO to FIFO forinventory valuation
A change from full-cost tosuccessful efforts in the extractive industry
A change to a different methodof depreciation for plant assets

Question 2. 2. (TCO E) What type of accountingchange/correction should always be accounted for in the current andfuture accounting periods? (Points : 5)

Change in accountingprinciple
Change in reportingentity
Change in accountingestimate
Correction of anerror

Question 3. 3. (TCO E) On December 31, 2013,Gifts Galore, Inc. appropriately changed its inventory valuationmethod from weighted-average cost to FIFO method for financialstatement and income tax purposes. The change will result in a$3,600,000 increase in the beginning inventory at January 1, 2013.Assume a 35% income tax rate. The cumulative effect of thisaccounting change on beginning retained earnings is (Points :5)

$0.
$1,260,000.
$3,600,000.
$2,340,000.

listed below are various types of accounting changes and errors1. change in a plant asset's salvage value. 2. Change due tooverstatement of inventory. 3. Change fro sum-of-the-years' digitsto straight-line method of depreciation. 4. Change from presentingunconsolidation to consolidated financial statements. 5. Changefrom LIFO to FIFO inventory method. 6. Change in the rate used tocompute warranty costs. 7. Change from an unacceptable accountingprinciple to an acceptable accounting principle. 8. Change in apatent's amortization period. 9. Change from completed-contract topercentage-of-completion method on construction contracts. 10.Change from FIFO to average-cost inventory method. Instructions Foreach change or error, indicate how it would be accounted for usingthe following code letters: (a) accounted for prospectively (b)accounted for retrospectively (c) Neither of the above

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