Answered: Current GAAP requires a company to…

Business

Accounting

Current GAAP requires a company to account for a change in accounting estimate that impacts multiple periods during

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 2GI

See similar textbooks

Related questions

Q: The change in accounting estimate should be treated currently and prospectively. True or false

A: A change in accounting estimate is a current change that affects the carrying value of Assets and…

Q: If it is impracticable to determine the cumulative effect of an accounting change to any of the…

A: There are situations when company adopt to new method of accounting due to which changes occur in…

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: If the income statement error is discovered in a subsequent accounting period, what action is to be…

A: Solution Nominal account is a general ledger account pertaining to all income , expenses , losses…

Q: Generally accepted methods of accounting for a change in accounting principle include restating…

A: Whenever a company is opts for a new accounting principle in its current financial statements. The…

Q: An example of an item that should be reported as a prior-period adjustment in a company’s annual…

A: Error correction:Error correction is an adjustment to previously issued financial statements. It is…

Q: When a company changes from one accounting principle to another accounting principle: a…

A: Retrospective adjustment means the adjustment is made to all the financial statements of the prior…

Q: A change in accounting estimate is An adjustment of the carrying amount of an asset or liability,…

A: Answer: Change in accounting estimate is the change in the value of the carrying amount of the…

Q: Which of the following is (are) the proper time period(s) to record the effects of a change in…

A: Change in accounting estimate means making changes in the estimated amount of assets and liabilities…

Q: Which of the following statements about a change in accounting estimate is not true?

A: Accounting estimates are judgments and assumptions made by management in measuring various assets ,…

Q: What impact may the low accuracy of accounting estimates have on the annual statements?

A: Accounting estimates means estimation of the accounting transactions based on different factors like…

Q: If the statement of financial position error is discovered in the year of error, what action is to…

A: Errors mean the data entered in the financial system is not as per accounting standard. There has…

Q: Under what conditions does a company recognize revenueover a period of time?

A: Revenue recognition principle: The revenue recognition principle refers to the revenue that should…

Q: What situation is an example of a change in accounting estimates? Can you briefly discuss how to…

A: A change in accounting estimate is a revaluation of the projected future benefits and…

Q: Entities should disclose all of the following in interim financial report, except: a. Basic and…

A: Earlier period blunders are oversights from, and misquotes in, the substance's budget summaries for…

Q: A change in accounting policy requires what kind of adjustment to the financial statements? A.…

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: Which type of accounting change should always be accounted for in current and future periods?…

A: Change in accounting policy and reporting entity should not be accounted in current and future…

Q: Using IFRS, how should prior period errors that are discovered in a subsequent reporting period be…

A: IFRS: They are commonly known as IFRS. It is a set of accounting standards which are developed by…

Q: the income statement error is discovered in the year of error, what action is to be done by the…

A: Solution Concept If the income statement error is discovered in the year of error then that error…

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: The effect of a revision of an accounting estimate must be recognised in profit and loss in which…

A: The estimate is based upon the opinion of one person that can vary in upcoming periods.

Q: ich of the following is true of accounting for changes in estimates? a. A company recognizes a…

A: Solution: A change in estimate occurs due to change in any available information which changes the…

Q: Which of the following accounting changes is always accounted for prospectively? O correction of an…

A: Changes in accounting policies and corrections of errors are accounted for retrospectively, However…

Q: What are interim financial statements? Do accounts thatappear in a company’s interim balance sheet…

A: Financial statements: Financial statements are condensed summary of transactions communicated in the…

Q: A change in accounting policy requires that the cumulative effect of change for prior periods should…

A: As Per IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" when a change in…

Q: Please help with the following question, need accurate and full answer. What is the effect on…

A: Journal entries means the book of prime entry incuding debit and credit item. Adjusting entry means…

Q: According to IAS 8, how should prior period errors that are discovered in a subsequent reporting…

Q: Where a change in accounting estimates occurs, which of the following should be disclosed? A. The…

A: A change in accounting estimates is: A change that has the effect of adjusting the carrying amount…

Question

Current GAAP requires a company to account for a change in accounting estimate that impacts multiple periods during

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

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 an item that should be reported as a prior-period adjustment in a company’s annual financial statements is a. a settlement resulting from litigation. b. an adjustment of income taxes. c. a correction of an error that occurred in a prior period. d. an adjustment of utility revenue because of rate revisions ordered by a regulatory commission.
When a company recognizes revenue during a period, what does it also recognize in its balance sheet?
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:
What are interim financial statements? Do accounts thatappear in a company’s interim balance sheet require anyspecial computations to be reported correctly? Explain.
What impact may the low accuracy of accounting estimates have on the annual statements?
The change in accounting estimate should be treated currently and prospectively. True or false
Which of the following disclosures is not required for a change from average cost to FIFO? Select one: O a. The nature of the change in accounting policy O b. The amount of the adjustment relating to periods before those presented O c. All of these are required. O d. Basic and diluted earnings per share for the current period and each prior period presented
If it is impracticable to determine the cumulative effect of an accounting change to any of the prior periods, the accounting change should be accounted for a. as a cumulative effect change on the income statement b. as a prior period adjustment c. on a prospective basis d. as an adjustment to retained earnings
Which type of accounting change should always be accounted for in current and future periods? Change in accounting policy Change in reporting entity Change in accounting estimate Correction of an error
Where a change in accounting estimates occurs, which of the following should be disclosed? A. The nature of the change and the impact on previous income statements The fact that the amount of the effect on future periods will not be disclosed because B. estimating that amount is impracticable and the reason for the change and comparative data to show the impact with and without the change The fact that the amount of the effect on future C. periods will not be disclosed because estimating that amount is impracticable D. The reason for the change and comparative data to show the effect with and without the change
Using IFRS, how should prior period errors that are discovered in a subsequent reporting period be recognized in the financial statements? a. As an adjustment to beginning retained earnings for the reporting period in which the error was discovered. b. As a note in the financial statements that the error was previously made but has since been corrected. c. In the current period if it’s not considered practicable to report it retrospectively. d. In the statement of comprehensive income.
If the statement of financial position error is discovered in the year of error, what action is to be done by the entity? Ignore the Reclassify the item to its proper real account. Adjust the effect to the retained earnings account. Reclassify the item to nominal account.