The following are independent events. For each change or error select how it would be accounted for. a. Changed remaining service life from 8 years to 10 years b. Change from an unacceptable accounting method to an acceptable C. Received money won in a law suit d. Inventory write down due to obsolescence e. Change in rate used to calculate warranty costs f. Change from FIFO to average costs inventory method g. Discovered errors in unrecorded expenses from a prior period h. Purchased another company which now requires the financial statements to be consolidated

The following are independent events. For each change or error select how it would be accounted for. a. Changed remaining service life from 8 years to 10 years b. Change from an unacceptable accounting method to an acceptable C. Received money won in a law suit d. Inventory write down due to obsolescence e. Change in rate used to calculate warranty costs f. Change from FIFO to average costs inventory method g. Discovered errors in unrecorded expenses from a prior period h. Purchased another company which now requires the financial statements to be consolidated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Statement 1 : Expenses associated directly with revenue are matchedagainst revenue in those interim periods in which the related revenue isrecognized. Statement 2 : Inventory losses from permanent marketdeclines are recognized in the interim period in which the decline occurs.Recoveries of such losses on the same inventory in later interim periodshould be recognized as gains in the interim periods where the declineoccurred A. Only statement 1 is trueB. Only statement 2 is trueC. Both statements are falseD. Both statements are true
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PROBLEM 1: Identifying effects of common errors Requirement: Complete the schedule below by entering an Q to indicate overstatement, a I to indicate understatement, and NE if no effect. Effect of Error On: Net income Assets Liabilities Capital a. Ending inventory for 2020 understated: 2020 financial statements 2021 financial statements b. Ending inventory for 2021 overstated: 2020 financial statements 2021 financial statements c. Failed to record depreciation in 2020: 2020 financial statements 2021 financial statements d. Failed to record accrued salaries payable in 2020: 2020 financial statements 2021 financial statements e. Overstatement of accrued rent revenue in 2020: 2020 financial statements 2021 financial statements f. Failed to record a liability resulting from revenue collected in advance at end of 2020; instead, credited revenue in full erroneously: 2020 financial statements 2021 financial statements g. Failed to record an asset resulting from expenses paid in advance at end…
Kindly help me solve no. 4 and 5 with clear solution please. Thank you so much
For each change or error below, indicate how it would be accounted for. 1. Change due to understatement of inventory. options: A.) accounted for prospectively b.) prior period adjustment 2. change from direct write-off to allowance method of accounting for bad debts. Options: a.) accounted for retrospectively b.) prior period adjustment
To ensure that the Allowance for Doubtful Accounts account does not became materially misstated over time, companies revise overestimates of prior periods by Multiple Choice lowering estimates in the current period. recording a retroactive correcting entry increasing estimates in the current period. notifying the users of its financial statements of the error. O
State how each of the following items is reflected in thefinancial statements.(a) Change from FIFO to LIFO method for inventoryvaluation purposes.(b) Charge for failure to record depreciation in a previousperiod.(c) Litigation won in current year, related to prior period.(d) Change in the realizability of certain receivables.(e) Write-off of receivables.(f) Change from the percentage-of-completion to thecompleted-contract method for reporting net income.
In order to generate interim financial reports that contain a reasonable portion of annual expenses, which of the following statements is true? a. an allocation of a portion of an annual bonus would be made as an interim adjustment b. any adjustments for inventory shrinkage would be deferred to year end c. the allowance for uncollectible accounts receivable will be revised at year end d. None of the above are true
Note:- • Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. • Answer completely. • You will get up vote for sure.
Explain why errors in the valuation of inventory at the endof the year are sometimes called “counterbalancing” or“self-correcting.”