Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 4.10Q
To determine
Accounting changes:
Accounting changes are the differences in accounting principles, accounting estimates or the reporting entity.
To describe: The period(s) in which the effect of changes in accounting estimate reported.
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Students have asked these similar questions
Accountants very often are required to make estimates, and very often those estimates prove incorrect. In what period(s) is the effect of a change in an accounting estimate reported?
Which of the following is not a characteristic of non-counterbalancing error?
a. If not detected, this is not automatically corrected in the next accounting period.
b. The income statement of the period in which the non-counterbalancing error is committed is misstated.
c. The statement of financial position of the year of non-counterbalancing error and succeeding statement of financial position are incorrect until the error is corrected.
d. If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected.
Which of the following statements about a change in accounting estimate is not true?
A.
A change in accounting estimate can only be made when it is required to comply with an accounting standard or interpretation.
B.
Changes in accounting estimates result from new information or new developments.
C.
The effects of a change in accounting estimate should be applied prospectively.
D.
A change in estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic consumption of an asset.
Chapter 4 Solutions
Intermediate Accounting
Ch. 4 - The income statement is a change statement....Ch. 4 - What transactions are included in income from...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - What are restructuring costs and where are they...Ch. 4 - Define intraperiod tax allocation. Why is the...Ch. 4 - How are discontinued operations reported in the...Ch. 4 - What is meant by a change in accounting principle?...Ch. 4 - Prob. 4.10Q
Ch. 4 - The correction of a material error discovered in a...Ch. 4 - Define earnings per share (EPS). For which income...Ch. 4 - Prob. 4.13QCh. 4 - Describe the purpose of the statement of cash...Ch. 4 - Prob. 4.15QCh. 4 - Explain what is meant by noncash investing and...Ch. 4 - Distinguish between the direct method and the...Ch. 4 - Prob. 4.18QCh. 4 - Prob. 4.19QCh. 4 - Show the calculation of the following...Ch. 4 - Show the DuPont frameworks calculation of the...Ch. 4 - Prob. 4.22QCh. 4 - Prob. 4.23QCh. 4 - Prob. 4.1BECh. 4 - Multiple -step income statement LO41, LO43 Refer...Ch. 4 - Prob. 4.3BECh. 4 - Multiple -step income statement LO41, LO43 The...Ch. 4 - Prob. 4.5BECh. 4 - Prob. 4.6BECh. 4 - Prob. 4.7BECh. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Prob. 4.10BECh. 4 - Prob. 4.11BECh. 4 - Prob. 4.12BECh. 4 - Statement of cash flows; indirect method LO48 Net...Ch. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Profitability ratios LO410 The 2018 income...Ch. 4 - Prob. 4.17BECh. 4 - Inventory turnover ratio LO410 During 2018, Rogue...Ch. 4 - Operating versus Nonoperating Income LO41 Pandora...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Multiple-step continuous statement of...Ch. 4 - Income statement presentation LO41, LO45 The...Ch. 4 - Prob. 4.6ECh. 4 - Income statement presentation; discontinued...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Earnings per share LO45 The Esposito Import...Ch. 4 - Comprehensive income LO46 The Massoud Consulting...Ch. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - IFRS; statement of cash flows LO48, LO49 Refer to...Ch. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Statement of cash flows; direct method LO48 Refer...Ch. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Concepts; terminology LO41, LO42, LO43, LO44,...Ch. 4 - Inventory turnover; calculation and evaluation ...Ch. 4 - Evaluating efficiency of asset management LO410...Ch. 4 - Profitability ratios LO410 The following...Ch. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31ECh. 4 - Prob. 4.32ECh. 4 - Comparative income statements; multiple-step...Ch. 4 - Discontinued operations LO44 The following...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Restructuring costs; Discontinued operations;...Ch. 4 - Income statement presentation; Restructuring...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Income statement presentation; statement of...Ch. 4 - Multiple-step statement of income and...Ch. 4 - Statement of cash flows LO48 The Diversified...Ch. 4 - Integration of financial statements; Chapters 3...Ch. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Calculating activity and profitability ratios ...Ch. 4 - Use of ratios to compare two companies in the same...Ch. 4 - Creating a balance sheet from ratios; Chapters 3...Ch. 4 - Prob. 4.15PCh. 4 - Interim financial reporting Appendix 4 Branson...Ch. 4 - Prob. 4.1BYPCh. 4 - Judgment Case 42 Restructuring costs LO43 The...Ch. 4 - Prob. 4.3BYPCh. 4 - Prob. 4.4BYPCh. 4 - Prob. 4.5BYPCh. 4 - Prob. 4.6BYPCh. 4 - Prob. 4.7BYPCh. 4 - IFRS Case 48 Statement of cash flows;...Ch. 4 - Judgment Case 49 Income statement presentation;...Ch. 4 - Prob. 4.10BYPCh. 4 - Integrating Case 412 Balance sheet and income...Ch. 4 - Prob. 4.13BYPCh. 4 - Prob. 4.17BYPCh. 4 - Prob. 4.18BYPCh. 4 - Continuing Cases Target Case LO43, LO44, LO46,...
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Similar questions
- Explain the concept of hindsight in relation to changes in accounting estimates and errors. How should the use of hindsight be balanced with the requirement to make estimates based on information available at the time?arrow_forwardWhere 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 changearrow_forwardWhen it is difficult to distinguish between a change in accounting estimate and a change in accounting policy, the change is treated as: a. Change in accounting estimate with appropriate disclosure b. Change in accounting policy c. Correction of error d. Change in accounting estimate with no appropriate disclosurearrow_forward
- When it is difficult to distinguish a change in accounting policy from achange in an accounting estimate, the change is treated as A. Change in accounting estimate with appropriate disclosureB. Change in accounting policyC. Correction of an errorD. Initial adoption of an accounting policyarrow_forwardDiscuss how a change in accounting policy is handled when it is impracticable to determine previous amounts.arrow_forwardWhat are interim reports? Why is a complete set of financial statements often not provided with interim data? What are the accounting problems related to the presentation of interim data?arrow_forward
- What impact may the low accuracy of accounting estimates have on the annual statements?arrow_forwardWhich statement is incorrect concerning accounting estimate a.As a result of uncertainties inherent in business activities, many items in financial statements cannot be measured withprecision but can only be estimated. b.By its very nature, the revision of an estimate relates to a prior period and is a correction of an error. c.The use of reasonable estimate is an essential part of the preparation of financial statements and does not determinetheir reliability. d.An estimate may need revision if changes occur in the circumstances on which the estimate was based or as result ofnew information or more experience.arrow_forwardWhy should the beginning retained earnings be adjusted for prior period errors and effects of change in accounting policy?arrow_forward
- If it is material, which of the following does not require all prior reported financial statements and/or retained earnings to be changed or adjusted? Group of answer choices Change in an accounting principle. Change in an estimate. Correction of an accounting error. The correct answer is not listed. Change in a reporting entity. Nextarrow_forwardWhich of the following is not classified as an accounting change by IFRS? a. Change in accounting policy. b. Change in accounting estimate. c. Errors in financial statements. d. None of the above.arrow_forwardDiscuss the tendency of ratios to fluctuate over time (which may or may not beproblematic), explain how they can be influenced by accounting practices aswell as other factors, and explain why they must be used with care.arrow_forward
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