Which of the following is an accounting error?
A)Inventory was sold below carrying amount even though the inventory had been previously written down to the lower of cost and net realizable value.
B)Convertible securities that were identified as dilutive for computing diluted EPS were not converted by the expiration date.
C)A change in economic conditions resulted in the fair value of goodwill declining from $15 million to $10 million.
D)Development costs of an intangible asset were capitalized when only five of six criteria for capitalization had been satisfied.

Question

Quizplus · Accepted Answer

Capitalizing development costs of an intangible asset when not all required criteria are met is an accounting error. Accounting standards specify criteria that must be fully met for costs to be capitalized; failing to meet all required criteria and still capitalizing the costs is incorrect.

Which of the Following Is an Accounting Error