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Accounting Changes and Error Analysis

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Accounting Changes and Error Analysis
CHAPTER 22

CHAPTER 22
ACCOUNTING CHANGES AND ERROR ANALYSIS
TRUE-FALSE—Conceptual
Answer
F T F T F T T T F T F F T F T T F F T T

No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Description
Change in accounting estimate. Errors in financial statements. Adoption of a new principle. Retrospective application of accounting principle. Reporting cumulative effect of change in principle. Disclosure requirements for a change in principle. Indirect effect of an accounting change. Retrospective application impracticality. Reporting changes in accounting estimates. Change in principle vs. change in estimate. Accounting for change in depreciation method. Accounting for change in reporting entities. Example of a change in reporting entities. Accounting error vs. change in estimate. Accounting for corrections of errors. New principle created by FASB standard. Balance sheet errors. Definition of counterbalancing errors. Accounting for counterbalancing errors. Correcting entries for noncounterbalancing errors.

MULTIPLE CHOICE—Conceptual
Answer
b b c No.

Description

d a c c 21. Accounting changes and consistency concept. 22. Identify changes in accounting principle. 23. Identify a non-retrospective change. 24. Identify a change in accounting principle. 25. Entry to record a change in depreciation methods. 26. Disclosures required for a change in depreciation methods. 27. Change from percentage-of-completion to completed-contracts.

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CHAPTER 22

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d b c a b b c d c c b

28. Disclosures required for a change from LIFO to FIFO. 29. Change from FIFO to LIFO. 30. Change in accounting estimate. 31. Change in accounting estimate. 32. Identify a change in accounting estimate. 33. Change in accounting estimate. 34. Identify a change in accounting estimate. 35. Identify a change in reporting entity. 36.
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