The four types of accounting changes, including errorcorrection,are
changein accounting principle;
changein accounting estimate;
changein reporting entity; and
errorcorrection.
Required:
The following are a series of situations. Indicate the type ofchange.
1 Changingthe companies included in combined financial statements
2 Changein both estimate and acceptable accounting principles
3 Changefrom presenting nonconsolidated to consolidated financialstatements
4 Changefrom FIFO to LIFO inventory procedures
5 Changein amortization period for an intangible asset
6 Changedue to failure to recognize an accrued (uncollected) revenue
7 Changedue to charging a new asset directly to an expense account
8 Changedue to understatement of inventory
9 Changefrom straight-line to sum-of-the-years'-digits method ofdepreciation
10 Change inresidual value of a depreciable plant asset
11 Change inthe loss rate on warranty costs
12 Change inlife of a depreciable plant asset
13 Change dueto failure to recognize and accrue income
14 Change inexpected recovery of an account receivable
15 Change fromexpensing to capitalizing certain costs, due to a change in periodsbenefited
The four types of accounting changes, including errorcorrection,are
changein accounting principle;
changein accounting estimate;
changein reporting entity; and
errorcorrection.
Required:
The following are a series of situations. Indicate the type ofchange.
1 Changingthe companies included in combined financial statements
2 Changein both estimate and acceptable accounting principles
3 Changefrom presenting nonconsolidated to consolidated financialstatements
4 Changefrom FIFO to LIFO inventory procedures
5 Changein amortization period for an intangible asset
6 Changedue to failure to recognize an accrued (uncollected) revenue
7 Changedue to charging a new asset directly to an expense account
8 Changedue to understatement of inventory
9 Changefrom straight-line to sum-of-the-years'-digits method ofdepreciation
10 Change inresidual value of a depreciable plant asset
11 Change inthe loss rate on warranty costs
12 Change inlife of a depreciable plant asset
13 Change dueto failure to recognize and accrue income
14 Change inexpected recovery of an account receivable
15 Change fromexpensing to capitalizing certain costs, due to a change in periodsbenefited
