CH 18. - Accounting Changes & Error Corrections

Question 1

The purpose of the is ____________ to provide those disclosures required by generally accepted accounting principles.

Answer 1

notes to the financial statements

Question 2

Which of the following disclosures should prospective financial statements include?

Answer 2

I. Summary of significant accounting policies

II. Summary of significant assumptions

Question 3

One note that is always included in GAAP financial statements is the ______________. This note identifies the accounting principles and methods used by the entity for items that have more than one acceptable approach under GAAP (eg, basis or principles of consolidation used).

Answer 3

summary of significant accounting policies

Question 4

How would IFRS account for a change in accounting principle?

Answer 4

On a retrospective basis.

Question 5

The summary of significant accounting policies describes the client’s __________ and __________

Answer 5

Accounting Principles and Methods

Question 6

A change in an asset’s salvage value, depreciation method, or useful life is a change in accounting estimate and should be accounted for ___________.

Answer 6

prospectively.