Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
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.
|