isted below are various types of accounting changes or errors. 6. Change due to understatement of inventory.
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#6-10 please, thank you!
listed below are various types of accounting changes or errors.
6. Change due to understatement of inventory.
7. Change in the rate used to compute bad debt expense.
8. Change from presenting unconsolidated to
consolidated financial statements.
9. Change from direct write-off to allowance
method of accounting for
10. Change from LIFO to average-cost inventory method.
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- There are various types of accounting changes, each of which is required to be reported differently.Required:1. What type of accounting change is a change from the sum-of-the-years’-digits method of depreciation to thestraight-line method for previously recorded assets as a result of new information related to production patterns? Under what circumstances does this type of accounting change occur?2. What type of accounting change is a change in the expected service life of an asset arising because of moreexperience with the asset? Under what circumstances does this type of accounting change occur?Listed below are various types of accounting changes and errors. ________ 1. Change in a plant asset's salvage value. ________ 2. Change due to overstatement of inventory. ________ 3. Change from sum-of-the-years'-digits to straight-line method of depreciation. ________ 4. Change from presenting unconsolidated to consolidated financial statements. ________ 5. Change from LIFO to FIFO inventory method. ________ 6. Change in the rate used to compute warranty costs. ________ 7. Change from an unacceptable accounting principle to an acceptable accounting principle. ________ 8. Change in a patent's amortization period. ________ 9. Change from completed-contract to percentage-of-completion method on construction contracts. ________ 10. Change from FIFO to average-cost inventory method. Instructions For each change or error, indicate how it would be accounted for using the following code letters: a. Accounted for prospectively. b. Accounted for retrospectively. c. Neither…An example of a correction of an error is a change: a. From FIFO inventory valuation to the average method b. In the service life of property, plant and equipment c. From cash basis to accrual basis of accounting d. In the tax assessment related to a prior period
- When the estimate of an asset's useful life is changed, select the false statement a. depreciation expense for all past periods must be recalculated. b. there is a change in the amount of depreciation expense recorded for future years. c. only the depreciation expense in the remaining years is changed. d. None of the above is trueWhich of the following is not a retrospective-type accounting change? A. Cost recovery method to the percentage of completion method for construction contracts. B. Weighted average to FIFO for inventory valuation. C. “Full cost method” to “successful effort method” in the extractive industry. D. Percent of sales method to aging method in recognizing doubtful accounts.Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.
- There are various types of accounting changes, each of which is required to be reported differently. Required: 1. What type of accounting change is a change from the sum-of-the-years’-digits method of depreciation to the straight-line method for previously recorded assets? Under what circumstances does this type of accounting change occur? 2. What type of accounting change is a change in the expected service life of an asset arising because of more experience with the asset? Under what circumstances does this type of accounting change occur?Which of the following statements is not correct? Multiple Choice The cost less the salvage value equals the depreciable base of a long-term asset. Uncollectible Accounts Expense is a contra asset account. If a firm records prepaid expense items in an expense account when they pay for them, their adjustment at the end of the period to record the unexpired portion would include a debit to an asset account and a credit to an expense account. Each adjustment for an accrued expense includes a credit to a liability account.The following statements relate to the depreciation of property, plant and equipment. Which statement is incorrect? A. the change in the expected pattern of consumption of economic benefits of a depreciation asset should be accounted for as a change in accounting policy and the effect is included in retained earnings. b. The change in the expected pattern of consumption of economic benefits of a depreciable asset should be accounted for as a change in accounting estimate and the effect is included in the determination of income or loss in the period of change and future periods. c The sum of unit method results in a charge based on the expected use or output of the asset D The useful life of an Item of property, plant and equipment should be reviewed periodically and it expectations are significantly different from previous estimates the depreciation charge for the current and future periods should be adjusted
- Salvage value is not considered directly in the determination of the deprecation amount with the a.sum-of-the-years'-digits method. b.straight-line method. c.declining-balance method. d.units-of-production method.Which of the following statements about MACRS is false?A. Depreciable assets are assumed to have no residual or salvage value.B. Every depreciable asset is assigned to one of ten recovery periods.C. Allowable depreciation methods are based on the assets assigned recovery period.D. None of the above is false. please explain without plagiarismChanges in the estimates for residual value or useful life result in changes in the depreciation expense calculation. These changes are handled O retroactively. O as cumulative changes. O prospectively. O as prior period adjustments.