It’s not easy sometimes to distinguish between a change in principle and a change in estimate. In these cases, how should the change be accounted for?

Q: A misstatement related to which of the following assertions means the dollar amount of the account…

A: Completeness represents that the financial statement of the company would be required to be…

Q: Salaries of the office staff, advertising expense, and depreciation expense would be included in the…

A: Production Budget :— This budget estimates the number of units to be produced during the period.…

Q: In what situation would LIFO not provide a better match of revenues and expense

A: "LIFO" stands for last-in, first-out, meaning that the recently purchased inventory items are…

Q: How is a correction of an accounting error made?

A: Accounting error:   It is a non-fraudulent discrepancy in the financial documents of an…

Q: When it is impossible to determine whether a change is a change in estimate or a change in policy,…

A: As per relevant accounting rules, accounting policy refers to the type of valuation or method a…

Q: What is the put-call ratio? What is it used for? What are considered high and low values and what do…

A: The question is based on the concept for indicators of the stock market performance. The Put-Call…

Q: A critical assumption of the exploratory factor analysis (EFA) is that it is only appropriate for…

A: Definition: Exploratory Factor Analysis (EFA): It is a statistical approach to determine the…

Q: Why does FASB like the retrospective approach? Does it always have to be used?

A: The FASB stands for the Financial Accounting Standards Board. It is a non-profit organization that…

Q: The Current Ratio Although the current ratio can be useful, what does it not disclose or not take…

A: Accounting Ratios are financial ratios through which a company can analyze its performance in terms…

Q: Explain errors of principle and give two examples with measures to rectifythem.

A: An error of principle is an accounting mistake in which an entry is recorded in the incorrect…

Q: It is good to assume that unusual items will be zero. True or False

A: Unusual or Infrequent Items are transactions that are unusual in nature or infrequent. The items…

Q: Since estimates are not actual amounts and are used to approximate, there is not a need for the…

A: Accounting estimates means an estimate which is made on the basis of information given at the point…

Q: The use of the word “prior” is a key indicator that information is nonrelevant to a current…

A: The use of the word "prior" is not a key indicator to know that information is non-relevant to a…

Q: Which of the following is the maximum misstatement that can exist in an account before it is…

A: MisstatementThe difference between the required amounts in the presentation or disclosure and the…

Q: Why is Decpreciaiton a Process of alloacation and not valuation?

A: Depreciation is an expense which shows the decrease in the value of depreciable assets due to its…

Q: t more difficult to maintain a short position than a long position. True or false? Explain your ans

A: There are two methods in the stock market one is to go long in the market and other is you go short…

Q: The definition of provision in uses the term ‘probable’. How would you interpret ‘probable’? What…

A: Provisions are shown on the liability side of the balance sheet.

Q: g balance method of C

A: The formula of declining balance method as, Depreciation per annum as, = (Net Book Value - Residual…

Q: Would a change from Completed Contract to Percentage of Completion be a change in accounting…

A: Change in accounting principle means that change in how financial information is calculated, while…

Q: explain why the author's assessment of the appropriateness of the going concern assumptions is so…

A: Going Concern Assumption- As per the going concern assumption business will continue its…

Q: percentage method

A: Income Tax refers to the amount paid to the government by the businesses and individuals on the…

Q: Would the above decision change if they applied the IRR method? When do the two methods give…

A: Data given:   Scenario A Scenario B Year Free Cash Flow ($) Free Cash Flow ($) 0 -87000…

Q: Why proponents of LIFO argue that it provides a better match of revenue and e expenses? In what…

A: Introduction:- FIFO and LIFO accounting are inventory management and financial accounting procedures…

Q: s

A: Interim reporting : An interim statement is a financial report that covers a period of less than a…

Q: An information is called as correct if it is. a. Misleading b. Free from error c. Irrelevant d. Not…

A: An information is called as correct if it is not Misleading ,  Free from error , relevant and…

Q: If the trial balance is balanced, are we certain that there are no errors in it? How so?

A: Trial balance is the statement which is prepared by an entity to check if the debits in the books…

Q: What is the monetary threshold value, when a Statement of Advice (SOA) may be replaced by a Record…

A: Statement of advice is the way by which one can communicate his advice in relation to investment to…

Q: An inaccurate estimate of asset needs can have serious consequences. Explain how?

A: Estimates of assets:  Estimate of assets is the estimated worth of assets of original worth of…

Q: What is the meaning of “statistically significant” in relation to the null hypothesis?

A: Null hyptohesis is the assumption of no effect or no relationship between variables. The Null…

Q: What are the disadvantages and advantages of Analysis at the account level technique

A: Analysis at the account level: It is the method of accounting where the financial transaction's…

Q: 5) Is the cost method of valuation always reliable? What can be done to make the valuations…

A: The cost approach is one of the methods of real estate valuation by which the price a buyer should…

Q: What would the effect of the failure in the ratio measurement?

A: Ratio measurement in terms of financial world depicts that a single accounting figure by itself may…

Q: In what circumstances is the compressed adjustedpresent value (APV) model useful, and how wouldit be…

A: The question is based on the concept of adjusted present value (APV). APV uses net present value…

Q: The discount approach, reinvestment approach and combined approach were all incorrect.

A: Formula of MIRR: MIRR =  n - 1where n = number of yearsMIRR discounting approach : Discount approach…

Q: Explain how and why changes in estimates are reported prospectively.

A: Accounting exchanges are those exchanges that legitimately influence the financial statements of a…

Q: What is the VIX index? What is it used for? What are considered high values for the VIX and what do…

A: Volatility: - Volatility is a measure of movement or price variation in assets on daily, weekly,…