Accounting Changes and Error Corrections Flashcards

1
Q

Inventory Change from FIFO to LIFO

A

Change in Accounting Principle. Do Nothing.
When you go to LIFO OR LAHORE you DO NOTHING. You CAN’T build LAYERS!
EXCEPTION TO THE GENERAL RULE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Inventory Change from LIFO to FIFO

A

Change in Accounting Principle.

Retrospective

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

New Update on Accounting Standard

A

Change in Accounting Principle.

Retrospective

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Change from in method of Depreciation, Amortization and Depletion

A

Change in Accounting Principle.
NOT Retrospective. Treat it like Estimate!!!
EXCEPTION TO THE GENERAL RULE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Inventory Change from LIFO to to FIFO

A

Change in Accounting Principle.
Retrospective
Adjust the Beginning Retained Earning of Earliest Year Presented IF the year is NOT PRESENTED

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Is Change from Non-GAAP to GAAP a Change in Accounting Principle?

A

No. It is an ERROR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How do you implement the Retrospective change?

A

Cumulative effect of a change in accounting principle is equal to the difference between the amount of beginning Retained Earnings in the period of change and what the Retained Earnings would have been if the accounting change had been retroactively applied to ALL PRIOR AFFECTED PERIODS. Cumulative EFFECT is equal to the difference between beginning Retained Earnings in the first period presented and what Retained Earnings would have been if the new principle had been applied to ALL PRIOR PERIOD. (NET OF TAX)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Change in Lives of Fixed Assets

A

Change in Accounting Estimate

Prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Adjustment of year-end accrual of officers’ salaries and/or bonuses

A

Change in Accounting Estimate

Prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Write-down of Obsolete Inventory

A

Change in Accounting Estimate

Prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Material, nonrecurring IRS Adjustment

A

Change in Accounting Estimate

Prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Settlement of Litigation

A

Change in Accounting Estimate

Prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Changes in Accounting Principle that are inseparable from a change in estimate

A

Change in Accounting Estimate

  1. Going to LIFO
  2. Change in Depreciation Method
    (e. g., A change from the installment method to immediate recognition method because uncollectible accounts can now be estimated).
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Revisions of estimates regarding discontinued operation.

A

Change in Accounting Estimate

Prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly