Question 1

On January 1, 2010, Pamela Company purchased equipment for $48, 000.The estimated life was five years and the salvage value was estimated at $8, 000.On January 1, 2012, it was determined that the equipment's total useful life should have been estimated at seven years and the salvage value should have been estimated at only $4, 000.The company used straight-line depreciation.
Required:

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Question 2

Most errors are discovered automatically through proper use of the double-entry system or by the internal or external auditors.However, some errors escape detection until after they have been included in the published financial statements of a company.
Required:
Describe three types of errors that occur in financial statements and indicate the appropriate corrective action to take when the errors are discovered.

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Question 3

Most changes in accounting principles are accounted for retrospectively.Discuss how a change in accounting principle that causes a retrospective adjustment impacts the comparative financial statements issued for the current year.

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Question 4

Several items related to accounting changes appear below.
  Required:
Indicate the appropriate method of accounting for each case by placing an "X" in the appropriate column.Part (a)has been completed as an example.

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Question 5

Current GAAP defines three types of changes:
 a. Changes in accounting principle
b. Changesin accounting estimate
c. Changes in reporting entity
 Define each item, give an example, and describe how it should be accounted for.

Accepted Answer

The answer of Current GAAP defines three types of changes:
...

Question 6

Match between columns
                        Premises: Future value of $1
Present value of $1
Future value of an annuity due of $1
Future value of an ordinary annuity of $1
Present value of an ordinary annuity of $1
Present value of an annuity due of $1

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Quiz 23: Accounting for Changes and Errors

Most changes in accounting principles are accounted for retrospectively.Discuss how a change in accounting principle that causes a retrospective adjustment impacts the comparative financial statements issued for the current year.

Several items related to accounting changes appear below. Required: Indicate the appropriate method of accounting for each case by placing an "X" in the appropriate column.Part (a)has been completed as an example.

Current GAAP defines three types of changes: a. Changes in accounting principle b. Changesin accounting estimate c. Changes in reporting entity Define each item, give an example, and describe how it should be accounted for.

Match the diagrams with the concepts by writing the identifying letter of the diagram on the blank line to the left of the concept. "VAL" represents the value to be calculated.