Unformatted text preview: retrospectively Change from the direct write-off method to the allowance method for recording bad debt expense. (Assume bad debts are material in this case and have always been material.) 8 7. Change in reporting entity Change from declining balance depreciation to straight-line. 3 8. Prior period adjustment required Change from determining lower of cost or market for inventories by the individual item approach to the aggregate approach. 1 9. Change in principle reported prospectively Settling a lawsuit for less than the amount accrued previously as a loss contingency. 2 10. Change in estimate Change in the estimated useful life of office equipment. 2 AACSB: Reflective thinking Bloom's: Comprehension...
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- Spring '10
- Accounting, consolidated financial statements, benefit pension plan, AACSB, FIFO and LIFO accounting, Cash balance plan, FIFO inventory method