Choose the best accounting treatment for each of the following items. Change from straight-line to sum of the year's digits depreciation A. Change in reporting entity reported prospectively B. Change in estimate reported prospectively Change from adjusting the valuation allowance for deferred tax assets Change from individual to consolidated financial C. Correction of an error reported prospectively statement Change as a result of a failure to record depreciation in a prior period Change from cash basis to accrual basis of accounting Change from completed contract to percent of completion Change from FIFO to LIFO method for inventory D. Change in accounting principle reported retrospectively E. Change in accounting principle reported prospectively F. Correction of an error reported retrospectively G. Change in estimate reported retrospectively valuation Change in the realizability of accounts receivable H. Change in reporting entity reported retrospectively

Choose the best accounting treatment for each of the following items. Change from straight-line to sum of the year's digits depreciation A. Change in reporting entity reported prospectively B. Change in estimate reported prospectively Change from adjusting the valuation allowance for deferred tax assets Change from individual to consolidated financial C. Correction of an error reported prospectively statement Change as a result of a failure to record depreciation in a prior period Change from cash basis to accrual basis of accounting Change from completed contract to percent of completion Change from FIFO to LIFO method for inventory D. Change in accounting principle reported retrospectively E. Change in accounting principle reported prospectively F. Correction of an error reported retrospectively G. Change in estimate reported retrospectively valuation Change in the realizability of accounts receivable H. Change in reporting entity reported retrospectively

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Completing A Quality Audit

Section: Chapter Questions

Problem 27CYBK

See similar textbooks

Related questions

Q: Which of the following events or transactions has NO effect on retained earnings? a. Net income. b.…

A: The correct answer is Option (c).

Q: QUESTION: AN ACCOUNTANT'S COMPILATION REPORT SHOULD BE DATED AS OF THE DATE OF: A. COMPLETION…

A: Option A: This option is incorrect because the date of completion of a report by the accountant…

Q: Which of the following principles matches expenses with associated revenues in the period in which…

A: Solution:- the following principles matches expenses with associated revenues in the period in which…

Q: Under IFRS, how should changes in accounting policy be recognized in the financial statements? a.…

A: Change in Accounting Policy:A Change in accounting policy occurs if there has been a change in the…

Q: When a balance sheet amount is related to an income statement amount in comparing a ratio a. The…

A: Solution: When a balance sheet amount is related to an income statement amount in comparing a ratio…

Q: Which of the following causes a change in cash? O Accrual of interest payable. O Recording of…

A: Changes in cash can be either increase or decrease in the cash balance. Depreciation expense is a…

Q: Activity 13. Determining the Effects of Omissions. For each of the following situations, state the…

A: Omission leads to Overstatement or understatement or have no effect on the total assets.

Q: The interim period is viewed as an integral part of the annual accounting period. b. The interim…

A: The correct option is (a) The interim period is viewed as an integral part of the annual accounting…

Q: Question: Which accounting principle states that revenue should be recognized when it is earned and…

A: Accounting principles are rules that ensure financial statements are trustworthy and comparable.…

Q: Concept Description 1. Cash-basis accounting. 2. Fiscal year. 3. Revenue recognition principle.…

A: A fiscal year need not be necessarily starting from January 1 and end on December 31.

Question

**Choose the best accounting treatment for each of the following items.**

1. Change from straight-line to sum of the year's digits depreciation
- B. Change in estimate reported prospectively

2. Change from adjusting the valuation allowance for deferred tax assets
- B. Change in estimate reported prospectively

3. Change from individual to consolidated financial statement
- A. Change in reporting entity reported prospectively

4. Change as a result of a failure to record depreciation in a prior period
- F. Correction of an error reported retrospectively

5. Change from cash basis to accrual basis of accounting
- D. Change in accounting principle reported retrospectively

6. Change from completed contract to percent of completion
- E. Change in accounting principle reported prospectively

7. Change from FIFO to LIFO method for inventory valuation
- G. Change in estimate reported retrospectively

8. Change in the realizability of accounts receivable
- C. Correction of an error reported prospectively

**Explanation:**

This table presents various scenarios involving changes in accounting practices or corrections of errors. Each scenario is matched with the appropriate accounting treatment. Prospective reporting signifies applying the change going forward, without altering past numbers, while retrospective reporting involves adjusting historical financial statements to reflect the change. Corrections of errors typically require retrospective adjustments to previous financial statements.

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

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
8.All of the following components are shown in the income statement net of applicable income taxes EXCEPT Group of answer choices A.cumulative effect of a change in accounting principle. B.extraordinary gain or loss. C.discontinued operations. D.gain or loss on sale of plant assets.
Current Attempt in Progress Which of the following disclosures is not required for a change from LIFO to FIFO? O indirect effect impact related to the change in accounting principle O the cumulative effect on prior years, net of tax, in the current retained earnings statement O restated prior year income statements O the justification for the change
An impairment loss for long-lived assets which are to be held and used should be reported on the income statement as a(n) a. Extraordinary item . b. Component of the income or loss from the operations of a discontinued segment. c. Cumulative effect of a change in accounting principle . d. Component of income from continuing operations before income taxes.
Question. A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment: a. on the Year 2 statement of retained earnings. b. on the Year 1 statement of retained earnings. c. accounted for with a cumulative "catch-up" adjustment in Year 2. d. on the Year 2 income statement. e. on the Year 1 income statement.
I need answers from item 1-5 please help.
Accounting treatment for changes in accounting principle are best described as: Multiple Choice Chose one of anwers Changes in accounting principle that are only permitted when FASB issues a standard that revises GAAP. Changes in accounting principle that are always accounted for using the retrospective approach which requires only a restatement of prior years’ presented financial information. Changes in accounting principle that may require both a restatement of prior years’ financial information and the recording of a cumulative adjustment to retained earnings. Tax effects are ignored when reporting changes in accounting principles.
Which of the following statement is correct regarding accounting changes that result in financial statements that are effect the statements of a different reporting entity? a.The financial statements of all prior periods presented are adjusted retrospectively. b.No restatements or adjustments are required if the changes involve the cost r equity methods of accounting for investments. c.Cumulative-effect adjustments should be reported as a separate item in the financial statements pertaining to the year of the change. d.No restatements or adjustments are required if the changes involve the cost or equity methods of accounting for investments.
provide correct and short answer. General Account
The following are examples of non-adjusting events after the reporting period that would generally result in disclosure, except A. The determination after the reporting period of the amount of profit-sharing or bonus payments. B. Changes in tax rates or tax laws enacted or announced after the reporting period that have a significant effect on current and deferred tax assets and liabilities. C. Entering into significant commitments or contingent liabilities, for example, by issuing significant guarantees. D.Abnormally large changes after the reporting period in asset prices or foreign exchange rates.
An entity changed from the straight-line method to the declining-balance methodof depreciation for all newly acquired assets. This change has no material effect onthe current year’s financial statements but is reasonably certain to have a substantialeffect in later years. If the change is disclosed in the notes to the financial statements,the auditor should issue a report with a(n)(1) qualified opinion.(2) unqualified opinion with explanatory paragraph.(3) unqualified opinion.(4) qualified opinion with explanatory paragraph regarding consistency.
Deferred tax accounting adjustments are recorded at what point in time? a. At the end of each month b. At balance date c. As each transaction arises or is incurred d. As the cash flows from each transaction occur