Chap020 (accounting) 64 - acquired several years ago that...

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57. Diversified Systems, Inc. this year reports consolidated financial statements in place of statements of individual companies reported in previous years. This results in A. An accounting change that should be reported prospectively. B. An accounting change that should be reported by restating the financial statements of all prior periods presented. C. A correction of an error. D. Neither an accounting change nor a correction of an error. This is a change in reporting entity to be accounted for retrospectively. That is, financial statements of prior periods are restated to report the financial information for the new reporting entity in all periods. AACSB: Analytic Bloom's: Synthesis Learning Objective: 20-05 Describe the situations that constitute a change in reporting entity. Level of Learning: Easy 58. Z Company has included in its consolidated financial statements this year a subsidiary
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Unformatted text preview: acquired several years ago that was appropriately excluded from consolidation last year. This results in A. An accounting change that should be reported prospectively. B. A correction of an error. C. An accounting change that should be reported by restating the financial statements of all prior periods presented. D. Neither an accounting change nor a correction of an error. This is a change in reporting entity to be accounted for retrospectively. That is, financial statements of prior periods are restated to report the financial information for the new reporting entity in all periods. AACSB: Analytic Bloom's: Synthesis Learning Objective: 20-05 Describe the situations that constitute a change in reporting entity. Level of Learning: Easy...
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