Answered: a correction in the calculation of…

Business

Accounting

a correction in the calculation of earnings per share of a prior period a material difference between the actual an

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4MC: A change in the expected service life of an asset arising because additional information has been...

See similar textbooks

Related questions

Q: Indicate the effect of the transactions listed in the following table on total current assets,…

A: A fixed asset is sold for less than book value: If fixed asset is sold, cash will be come into the…

Q: Which of the following statements is not correct? Multiple Choice The cost less the salvage…

A: Expenses: Expenses are costs incurred for the operations of a business. The costs incurred for…

Q: An adjustment, to the carrying amount of a non-current asset that ceases to be classified as ‘held…

A: If the noncurrent asset is classified as held for sale, it would be recorded in the income from…

Q: Changes in amortization method, useful life, and residual value are changes in accounting estimates…

A: Changes in accounting estimates include: Changes in the useful life of assets Changes in the…

Q: The following statements relate to the depreciation of property, plant and equipment. Which…

A: Lets start with basic understanding. Depreciation is a reduction in value of asset due to wear and…

Q: Accounting Changes It is important in accounting theory to be able to distinguish the types of…

A: Accounting theory is a set of assumptions, frameworks, and methodologies used in the study and…

Q: Choose the correct. How should material seasonal variations in revenue be reflected in interim…

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost.…

Q: Which of the following disclosures is not required for a change from average cost to FIFO? Select…

A: Any change in method of accounting leads to change in accounting principal. So a change in inventory…

Q: 1. An entity made a very large arithmetical error in the calculation of depreciation. The correction…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A change from the straight-line method of depreciation to sum-of-years' digits is accounted for as…

A: Change in accounting estimate relates with an estimates for doubtful allowance, estimate for…

Q: The Accountant for the a Company forgot to make an adjusting entry to record depreciation for the…

A: What is Depreciation? In business, the fixed asset is used over a long period. Due to this, there is…

Q: Explain is a change in depreciation method a change in accounting principle, or is it a change in…

A: According to the Accounting Standard 1- the change in the method of depreciation is a change in the…

Q: Which of the following would trigger a subtraction in the indirect operating section? A. decrease in…

A: The correct option is B that is, gain on sale of investments as it is a non-operating gain that is…

Q: Which of the following would have an effect on the presentation of past years' comparable financial…

A: Financial Statement- Financial statements contain information about an entity's financial activity…

Q: Which of the following statements related to long-lived assets is true? Depreciation is…

A: Depreciation : Depreciation is an accounting method of allocating the cost of a tangible or…

Q: For each of the following items, indicate the type of accounting change. (a1) (a) Change from…

A: The accounting change is generally a change in accounting principle, change in accounting estimate,…

Q: Which of the following would NOT be reflected in the income statement?

A: Income statement- it is a part of financial statements prepared by the company that shows the…

Q: There are various types of accounting changes, each of which is required to be reported…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: A change in the liability for warranty costs requires a. presenting prior-period financial…

Q: Prepaid expenses Required: Each of the following statements may (or may not) describe one of these…

A: Match the terms with the given Statements. Required Each of the following statements may (or may…

Q: What is the effect of omission of accrued expenses in assets at the end of the year of error? a.…

Q: The accounting treatment for depreciation expense in the balance sheet will be: a. Added to the…

A: Solution: Depreciation is charged on non current assets like equipment, building, vehicle etc. It is…

Q: Statement 1 : Expenses associated directly with revenue are matched against revenue in those interim…

A: The revenue recognition principle could be a cornerstone of accumulation accounting alongside the…

Q: Which of the following statement is correct regarding accounting changes that result in financial…

A: Introduction:- The following statement is correct regarding accounting changes that result in…

Q: Depreciation for a prior period was incorrectly understated by $950,000. The error was discovered in…

A: Income Statement: - Income Statement focuses on revenues and expenses of the company during a…

Q: Which of the following is accounted for as a change in accounting policy? A. A change in the…

A: Change in Accounting Policy means switching from one typebod GAAp method to another Type of GAAP…

Q: What is the effect of omission of accrued expenses in assets at the end of the year of error? Group…

A: The correct option with proper explanation are as follows

Q: Accumulated depreciation is record on the balance sheet as ___? A. A reduction in corresponding…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: If a P2,500 adjustment for depreciation is omitted, which of the following financial statement…

Q: Which of the following requires an adjustment to the opening balance of retained earnings in the…

A: The term "retrospective effect" refers to the application of a change in principle to financial…

Q: Would a change from straight line depreciation to double declining balance be a change in accounting…

A: Accounting changes: When a company requires to sacrifice the consistent accounting methods and…

Q: What is the effect of omission of accrued expenses in assets at the end of the year of error? O No…

A: Accrued expenses are expenses that are recognised in the books of accounts before they have been…

Q: Which of the following statements is correct about an adjusting entry?

A: Meaning of Adjusting entries;- According to accountancy adjusting entries are those journal entries…

Q: tate the effect of the following errors if OVERSTATED, UNDERSTATED, or NO EFFECT. NO. ERRORS EFFECT…

A: Solution Concept Retained earnings is understated if net income is understated Retained earnings is…

Q: What is the effect of omission of accrued income in net income during the year of error? O…

A: Net income means the amount of profit earned after deducting all expenses from the revenue of the…

Q: What is the effect of omission of accrued income in assets at the end of the year of error? O NO…

A: A basic Accounting equation is given as under; Assets = Equity + Liabilities Meaning, Total…

Q: Revaluation account is normally not credited with which of the following items: Increase in the…

A: Revaluation account is usually prepared to report the variations in the worth of assets and…

Q: For each of the following transactions or adjustments, indicate the effect of the transaction or…

A: Accounting equation is based on the concept of the double entry system where it assumes that each…

Q: A company wishes to report the highest earnings possibleaccording to GAAP. Therefore, when…

A: Depreciation: It refers to a gradual decrease in the fixed asset’s value because of obsolescence,…

Q: Which of the following statements is correct? Options: • Prepayments of supplies initially…

A: Solution: "If unpaid expenses incurred during the accounting period are not accrued, the income for…

Q: What is the effect of omission of prepaid expense in retained earnings at the end of year 2? Group…

A: Prepaid expenses are those expenses which are related with future period of time but paid in advance…

Q: An example of a correction of an error is a change: a. From FIFO inventory valuation to the average…

A: Accounting:- Accounting is defined as the process of recording, summarizing, interpreting and…

Q: Which one of the following statements is true? a. Financial statement readers cannot determine…

A: Financial statement readers cannot determine whether the depreciation method used by a company is…

Question

Which of the following would appear as a prior period adjustment?

Group of answer choices

a correction in the calculation of earnings per share of a prior period

a material difference between the actual and estimated uncollectible accounts receivable

a material loss resulting from the sale of fixed assets which were acquired in a prior period

material error in the computation of depreciation expense in the Year 1 that was discovered and corrected in the Year 3

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Explanation

VIEW

Conclusion

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

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
If an adjustment includes an entry to Accumulated Depreciation, which type of adjustment is it? A. accrual B. deferral C. estimate D. cull
The cumulative effect of an accounting change should generally be reported as an adjustment to the beginning balance of retained earnings in tin period in which the change is made for a:
Which type of adjustment occurs when cash is either collected or paid, but the related income or expense is not reportable in the current period? A. accrual B. deferral C. estimate D. cull
A change in the expected service life of an asset arising because additional information has been obtained is: a. an accounting change that should be reported by restating the financial statements of all prior periods represented b. an accounting change that should be reported in the period of change and future periods if the change affects both c. a correction of an error d. not an accounting change
Which depreciation method calculates annual depreciation expense based on the book value of an asset? a. double-declining balanceb. sum-of-the-years'-digitsc. inventory systemsd. group depreciation
Which method of the matching principle is used when a company recognizes depreciation expense on the income statement? Group of answer choices A. Installment method B. Systematic and rational allocation C. Immediate recognition D. Associating cause and effect
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
Loss contingencies are usually recognized in the income statements of the period when a. realized b.the amount can be reasonably estimated c. occurrence is reasonably possible and the amount can be reasonable estimated d. occurrence is probable and the amount can be reasonably estimated This question is required.
Which one of the following statement about encumbrance is correct? a. Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as assets b. None of the options c. Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as liabilities d. Encumbrances are recorded at the estimated cost of goods ordered or services contracted for. The subsequent amount recognized as expenditures upon receipt of the goods and services may differ from the encumbered amount.
Reversing entries maybe used in unearned income when the original collection is recorded as a. Asset b. Liabilty c. Expense d. Income
A change in accounting policy requires what kind of adjustment to thefinancial statements? A. Current period adjustmentB. Prospective adjustmentC. Retrospective adjustmentD. Current and prospective adjustment