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248 Cards in this Set

  • Front
  • Back
a.
debit to Construction in Process.
b.
debit to Loss on Long-term Contracts in the amount of the difference on prior years, net of tax.
c.
debit to Retained Earnings in the amount of the difference on prior years, net of tax.
d.
credit to Deferred Tax Liability.
28.
a.
The cumulative effect on prior years, net of tax, in the current retained earnings statement
b.
The justification for the change
c.
Restated prior year income statements
d.
All of these are required.
29.
a.
A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
b.
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
c.
A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated.
d.
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be restated.
30.
a.
Change in accounting principle
b.
Change in reporting entity
c.
Change in accounting estimate
d.
Correction of an error
31.
a.
Current period and prospectively
b.
Current period and retrospectively
c.
Retrospectively only
d.
Current period only
32.
a.
change in accounting principle.
b.
change in accounting estimate.
c.
prior period adjustment.
d.
correction of an error.
33.
a.
continue to depreciate the building over the original 50-year life.
b.
depreciate the remaining book value over the remaining life of the asset.
c.
adjust accumulated depreciation to its appropriate balance, through net income, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.
d.
adjust accumulated depreciation to its appropriate balance through retained earnings, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.
34.
a.
Changes in accounting principle are always handled in the current or prospective period.
b.
Prior statements should be restated for changes in accounting estimates.
c.
A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate.
d.
Correction of an error related to a prior period should be considered as an adjustment to current year net income.
a.
materiality.
35.
b.
consistency.
c.
conservatism.
d.
objectivity.;
a.
A change from LIFO to FIFO for inventory valuation
b.
A change to a different method of depreciation for plant assets
c.
A change from full-cost to successful efforts in the extractive industry
d.
A change from completed-contract to percentage-of-completion;
a.
Completed-contract method to the percentage-of-completion method for long-term contracts
b.
LIFO method to the FIFO method for inventory valuation
c.
Sum-of-the-years'-digits method to the straight-line method
d.
"Full cost" method to another method in the extractive industry;
a.
A change in the estimated useful life of plant assets.
b.
A change from the cash basis of accounting to the accrual basis of accounting.
c.
A change from expensing immaterial expenditures to deferring and amortizing them as they become material.
d.
A change in inventory valuation from average cost to FIFO.
a.
credit to Accumulated Depreciation.
b.
debit to Retained Earnings in the amount of the difference on prior years.
c.
debit to Deferred Tax Asset.
d.
credit to Deferred Tax Liability.
a.
The cumulative effect on prior years, net of tax, in the current retained earnings statement
b.
Restatement of prior years’ income statements
c.
Recomputation of current and future years’ depreciation
d.
All of these are required.
27.
a.
debit to Construction in Process.
b.
debit to Loss on Long-term Contracts in the amount of the difference on prior years, net of tax.
c.
debit to Retained Earnings in the amount of the difference on prior years, net of tax.
d.
credit to Deferred Tax Liability.
28.
a.
The cumulative effect on prior years, net of tax, in the current retained earnings statement
b.
The justification for the change
c.
Restated prior year income statements
d.
All of these are required.
29.
a.
A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
b.
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
c.
A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated.
d.
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be restated.
30.
a.
Change in accounting principle
b.
Change in reporting entity
c.
Change in accounting estimate
d.
Correction of an error
31.
a.
Current period and prospectively
b.
Current period and retrospectively
c.
Retrospectively only
d.
Current period only
32.
a.
change in accounting principle.
b.
change in accounting estimate.
c.
prior period adjustment.
d.
correction of an error.
33.
a.
continue to depreciate the building over the original 50-year life.
b.
depreciate the remaining book value over the remaining life of the asset.
c.
adjust accumulated depreciation to its appropriate balance, through net income, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.
d.
adjust accumulated depreciation to its appropriate balance through retained earnings, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.
34.
a.
Changes in accounting principle are always handled in the current or prospective period.
b.
Prior statements should be restated for changes in accounting estimates.
c.
A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate.
d.
Correction of an error related to a prior period should be considered as an adjustment to current year net income.
35.
a.
A company acquires a subsidiary that is to be accounted for as a purchase.
b.
A manufacturing company expands its market from regional to nationwide.
c.
A company divests itself of a European branch sales office.
d.
Changing the companies included in combined financial statements.
36.
a.
a correction of an error.
b.
an accounting change that should be reported prospectively.
c.
an accounting change that should be reported by restating the financial statements of all prior periods presented.
d.
not an accounting change.
37.
a.
from the FIFO method of inventory valuation to the LIFO method.
b.
in the service life of plant assets, based on changes in the economic environment.
c.
from the cash basis of accounting to the accrual basis of accounting.
d.
in the tax assessment related to a prior period.
38.
a.
errors that correct themselves in two years.
b.
errors that correct themselves in three years.
c.
an understatement of purchases.
d.
an overstatement of unearned revenue.
39.
a.
b.
c.
d.
40.
a.
the ending inventory and retained earnings to be understated.
b.
the ending inventory, cost of goods sold, and retained earnings to be understated.
c.
no effect on net income, working capital, and retained earnings.
d.
cost of goods sold and net income to be understated.
21. Accounting
changes
22. Which
of
a. A
change
b. A
change
c. A
change
d. A
change
23. Which
of
a. Completed-contract
method
b. LIFO
method
c. Sum-of-the-years'-digits
method
d. "Full
cost"
24. Which
of
a. A
change
b. A
change
c. A
change
d. A
change
25. A
company
a. credit
to
b. debit
to
c. debit
to
d. credit
to
26. Which
of
a. The
cumulative
b. Restatement
of
c. Recomputation
of
d. All
of
27. A
company
a. debit
to
b. debit
to
c. debit
to
d. credit
to
28. Which
of
a. The
cumulative
b. The
justification
c. Restated
prior
d. All
of
29. Stone
Company
a. A
change
b. A
change
c. A
change
d. A
change
30. Which
type
a. Change
in
b. Change
in
c. Change
in
d. Correction
of
31. Which
of
a. Current
period
b. Current
period
c. Retrospectively
only
d. Current
period
32. When
a
a. change
in
b. change
in
c. prior
period
d. correction
of
33. The
estimated
a. continue
to
b. depreciate
the
c. adjust
accumulated
d. adjust
accumulated
34. Which
of
a. Changes
in
b. Prior
statements
c. A
change
d. Correction
of
35. Which
of
a. A
company
b. A
manufacturing
c. A
company
d. Changing
the
36. Presenting
consolidated
a. a
correction
b. an
accounting
c. an
accounting
d. not
an
37. An
example
a. from
the
b. in
the
c. from
the
d. in
the
38. Counterbalancing
errors
a. errors
that
b. errors
that
c. an
understatement
d. an
overstatement
39. A
company
Assets Liabilities Stockholders'
Equity Net
a. No
effect Understate Overstate Overstate.
b. No
effect Overstate Understate Understate.
c. Understate Understate No
effect No
d. Understate No
effect Understate Understate.
40. If,
at
a. the
ending
b. the
ending
c. no
effect
d. cost
of
a.
materiality.
b.
consistency.
c.
conservatism.
d.
objectivity.
a.
A change from LIFO to FIFO for inventory valuation
b.
A change to a different method of depreciation for plant assets
c.
A change from full-cost to successful efforts in the extractive industry
d.
A change from completed-contract to percentage-of-completion
b.
A change to a different method of depreciation for plant assets
Accounting changes are often made and the monetary impact is reflected in the financial statements of a company even though, in theory, this may be a violation of the accounting concept of
a. materiality.
b. consistency.
c. conservatism.
d. objectivity.
b. consistency.
Which of the following is not treated as a change in accounting principle?
a. A change from LIFO to FIFO for inventory valuation
b. A change to a different method of depreciation for plant assets
c. A change from full-cost to successful efforts in the extractive industry
d. A change from completed-contract to percentage-of-completion
b. A change to a different method of depreciation for plant assets
Which of the following is not a retrospective-type accounting change?
a. Completed-contract method to the percentage-of-completion method for long-term contracts
b. LIFO method to the FIFO method for inventory valuation
c. Sum-of-the-years'-digits method to the straight-line method
d. "Full cost" method to another method in the extractive industry
Sum-of-the-years'-digits method to the straight-line method
Which of the following is accounted for as a change in accounting principle?
a. A change in the estimated useful life of plant assets.
b. A change from the cash basis of accounting to the accrual basis of accounting.
c. A change from expensing immaterial expenditures to deferring and amortizing them as they become material.
d. A change in inventory valuation from average cost to FIFO.
A change in inventory valuation from average cost to FIFO.
A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a
a. credit to Accumulated Depreciation.
b. debit to Retained Earnings in the amount of the difference on prior years.
c. debit to Deferred Tax Asset.
d. credit to Deferred Tax Liability.
credit to Accumulated Depreciation.