ACC-296 CH.2 HW - , CHAPTER 2 HOMEWORK BE2-2 a) It is not...

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, CHAPTER 2 HOMEWORK BE2-2 a) It is not consistent due to the change of method to FIFO from weight average, which is not the same accounting treatment to similar events. b) This does not require any recognition in relevance to consistency. This company did not adopt any other accounting standards, for that it still uses the same accounting treatment, therefore it is still consistent. c) This company does not notify any changes in their accounting methods, therefore we assume that the company still uses the same accounting treatment. The estimated life of the plant may have been reduced which probably caused more depreciation, but this does not mean that the company is not consistent. d) Although this company uses a different accounting valuation method that is different from all other companies in its industry does not mean it is not consistent, it might lack comparability but still assume that the company uses the same accounting method as it did from similar prior periods which still means its consistent. E2-1 a) Reliability b) Neutrality c) Comparability d) Relevance e) Consistency f) Feedback Value g) Verifiability h) Predictive Value + Representational Faithfulness
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i) Timeliness j) Relevance + reliability
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This note was uploaded on 05/17/2010 for the course ACC- 296 taught by Professor Dr.danielr.brickner during the Spring '10 term at Eastern Michigan University.

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ACC-296 CH.2 HW - , CHAPTER 2 HOMEWORK BE2-2 a) It is not...

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