accounting changes and error corrections

Question 1

2 types of accounting changes
prospective
retrospective

Answer 1

prospective-estimate changes

retrospective-accounting principle change (ex fifo to lifo) and corrections of error in prior income

Question 2

retrospective application applies to the _____ year

Answer 2

beginning of the year

Question 3

the adjustment to retained earnings is called

Answer 3

prior period adj (error correction)
cumulative effect (changes in accounting principle)

Question 4

a change in a method of depreciation ( SL to DDB), amortization, or depletion would be a

Answer 4

prospective estimate change

Question 5

restatement of financials is done for

Answer 5

error correction