Chapter 22

CHAPTER 22

ACCOUNTING CHANGES AND ERROR ANALYSIS

TRUE-FALSe—Conceptual

Answer No. Description

F 1. Change in accounting estimate.

T 2. Errors in financial statements.

F 3. Adoption of a new principle.

T 4. Retrospective application of accounting principle.

F 5. Reporting cumulative effect of change in principle.

T 6. Disclosure requirements for a change in principle.

T 7. Indirect effect of an accounting change.

T 8. Retrospective application impracticality.

F 9. Reporting changes in accounting estimates.

T 10. Change in principle vs. change in estimate.

F 11. Accounting for change in depreciation method.

F 12. Accounting for change in reporting entities.

T 13. Example of a change in reporting entities.

F 14. Accounting error vs. change in estimate.

T 15. Accounting for corrections of errors.

T 16. New principle created by FASB standard.

F 17. Balance sheet errors.

F 18. Definition of counterbalancing errors.

T 19. Accounting for counterbalancing errors.

T 20. Correcting entries for noncounterbalancing errors.

Multiple Choice—Conceptual

Answer No. Description

b 21. Accounting changes and consistency concept.

b 22. Identify changes in accounting principle.

c 23. Identify a non-retrospective change.

d 24. Identify a change in accounting principle.

a 25. Entry to record a change in depreciation methods.

c 26. Disclosures required for a change in depreciation methods.

c 27. Change from percentage-of-completion to completed-contracts.

d 28. Disclosures required for a change from LIFO to FIFO.

b 29. Change from FIFO to LIFO.

c 30. Change in accounting estimate.

a 31. Change in accounting estimate.

b 32. Identify a change in accounting estimate.

b 33. Change in accounting estimate.

c 34. Identify a change in accounting estimate.

d 35. Identify a change in reporting entity.

c 36. Retroactive reporting a change in reporting entity.

c 37. Identify a correction of an error.

b 38. Identification of counterbalancing errors....