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Unformatted text preview: C HAPTER 20 Accounting Changes and Error Corrections M ULTIPLE C HOICE Q UESTIONS Theory/Definitional Questions 1 Treatment of change in reporting entity 2 Example of accounting change requiring cumulative effect adjustment 3 Examples of changes in accounting estimate 4 Identify changes in accounting principle 5 Example of changes in principle that require retroactive adjustment 6 Consistency concept behind reporting accounting changes and errors 7 Identify a change in reporting entity 8 Example of prior period adjustment item 9 Example of change in accounting principle 10 Treatment of change from unaccepted principle to accepted 11 When to report pro forma effects on net income 12 Reporting change in depreciation method 13 Reporting cumulative effect on prior years' earnings 14 Timing of recording change in accounting estimate 15 Reporting change in principle and estimate as change in estimate 16 Presentation of error correction on income statement, retained earnings statement 17 Identifying a change in reporting entity 18 Identifying a change in reporting entity 19 International standards on accounting changes and correction of errors 20 International standards on accounting changes and correction of errors 21 International standards on accounting changes and correction of errors Computational Questions 22 Computation of charge against income because of change in principle 23 Computation of amortization expense for change in life of patent 24 Determine income overstatement amount of errors 25 Cumulative effect of a change from weighted average to LIFO 26 Computation of effect of errors on income 27 Computation of effect of errors on retained earnings, income 28 Balance of accumulated depreciation after a change in estimate 29 Computation of effect of errors on income 229 230 Chapter 20 Accounting Changes and Error Corrections 30 Entry to correct unearned revenue errors 31 Computation of effect of errors on income 32 Depreciation expense to be recorded following an error 33 Entry to correct inventory errors 34 Computation of cumulative effect of accounting change 35 Computation of cumulative effect of accounting change 36 Computation of depreciation expense after change in method 37 Entries to record change from LIFO to FIFO 38 Computation of cumulative effect of change in estimated useful life 39 Computation of depreciation expense with change in estimated life 40 Computation of retroactive adjustment to retained earnings for inventory and depreciation expense errors P ROBLEMS 1 Change in principle--prepare adjustment amount and entries 2 Record depreciation expense after change in estimate 3 Change in estimate--record bad debt expense and allowance balance 4 Change in principle--record depreciation expense and effect of change 5 Change in principle--record depreciation expense and effect of change 6 Change in principle--prepare partial income statement, and pro forma disclosure 7 Journalize error corrections assuming open books for current year...
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This note was uploaded on 10/29/2010 for the course BUSINESS S 1 taught by Professor Vinc during the Spring '10 term at Georgian.
- Spring '10