which of the following is true of accounting for changes in estimates? course hero

Is accounting for changes in accounting estimates considered errors?

Changes in estimates are considered errors. O A company recognizes a change in estimate by making a retrospective Question: Which of the following is true of accounting for changes in accounting estimates O Changes in estimates are not carried back to prior years. None of the answers are correct.

When does a company account for changes in estimates?

A company accounts for changes in estimates only in the period of change, even though it affects the future periods. b. Changes in estimates are not carried back to adjust prior years.

Are changes in estimates carried back to adjust prior years?

Changes in estimates are not carried back to adjust prior years. c. A company recognizes a change in estimate by making a retrospective adjustment to the financial statements. d. A company accounts for changes in estimates only in the period of change, even though it affects the future periods.

What is a change in accounting principle for prior periods?

A change in accounting principle requires that the cumulative effect of the change for prior periods be shown as an adjustment to: a. beginning retained earnings of the earliest period presented. b. net income of the period in which the change occurred. c. comprehensive income for the earliest period presented.

What is a change in estimates?

What was the Watts Corporation's arithmetical error?

Can changes in estimates be carried back to adjust prior years?

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Chapter 4 quiz Test#2 Flashcards | Quizlet

Study with Quizlet and memorize flashcards containing terms like The major elements of the income statement are A. revenues, expenses, gains, and losses. B. revenue, cost of goods sold, selling expenses, and general expense. C. revenues, irregular items, and general expenses. D. operating section, nonoperating section, discontinued operations, extraordinary items, and cumulative effect., The ...

Accounting Chapter 4 Flashcards | Quizlet

Study with Quizlet and memorize flashcards containing terms like The major elements of the income statement are a. revenues, expenses, gains, and losses. b. revenue, cost of goods sold, selling expenses, and general expense. c. operating section, nonoperating section, discontinued operations, and cumulative effect. d. revenues, irregular items, and general expenses., The income statement ...

What is a change in estimates?

a. Changes in estimates are considered as errors.

What was the Watts Corporation's arithmetical error?

Watts Corporation made a very large arithmetical error in the preparation of its year-end financial statements by improper placement of a decimal point in the calculation of depreciation. The error caused the net income to be reported at almost double the proper amount. Correction of the error when discovered in the next year should be treated as

Can changes in estimates be carried back to adjust prior years?

b. Changes in estimates are not carried back to adjust prior years.

Answer

c. A company accounts for changes in estimates only in the period of change, even though it affects the future periods

New questions in Business

1. Matthew is working in the sales and service pathway providing new transportation options to his customers. Based on this, what does Matthew need to …

What is a change in estimates?

a. Changes in estimates are considered as errors.

What was the Watts Corporation's arithmetical error?

Watts Corporation made a very large arithmetical error in the preparation of its year-end financial statements by improper placement of a decimal point in the calculation of depreciation. The error caused the net income to be reported at almost double the proper amount. Correction of the error when discovered in the next year should be treated as

Can changes in estimates be carried back to adjust prior years?

b. Changes in estimates are not carried back to adjust prior years.