Accounting Principles MCQs

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How many acceptable approaches are there for changes in accounting principles?






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Retrospective restatement usually is not used for a:






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An accounting change that is reported by the prospective approach is reflected in the financial statements of:






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When a change in accounting principle is reported, what is sometimes sacrificed?






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When an accounting change is reported under the retrospective approach, prior years’ financial statements are:






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Regardless of the type of accounting change that occurs, the most important responsibility is:






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Which of the following changes would not be accounted for using the prospective approach?






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Accounting changes occur for which of the following reasons?






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Which of the following changes is not usually accounted for retrospectively?






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Which of the accounting changes listed below is more associated with financial statements prepared in accordance with U.S. GAAP than with Internationa...






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Which of the accounting changes listed below is more associated with financial statements prepared in accordance with U.S. GAAP than with Internationa...






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Which of the following changes should be accounted for using the retrospective approach?






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Companies should report the cumulative effect of an accounting change in the income statement:






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Disclosure notes related to a change in accounting principle under the retrospective approach should include:






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Which of the following is an example of a change in accounting principle?






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Which of the following is not an example of a change in accounting principle?






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When the retrospective approach is used for a change to the FIFO method, which of the following accounts is usually not adjusted?






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JFS Co. changed from straight-line to double-declining-balance depreciation. The journal entry to record the change includes:






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National Hoopla Company switches from sum-of-the-years’ digits depreciation to straight- line depreciation. As a result:






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If a change is made from straight-line to units-of-production depreciation, one should record the effects by a journal entry including:






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On January 2, 2018, Tobias Company began using straight-line depreciation for a certain class of assets. In the past, the company had used double-decl...






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Which of the following accounting changes should not be accounted for prospectively?






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Prior years’ financial statements are restated under the:






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A change that uses the prospective approach is accounted for by:






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The cumulative effect of most changes in accounting principle is reported:






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When an accounting change is reported under the retrospective approach, account balances in the general ledger:






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During 2018, Hoffman Co. decides to use FIFO to account for its inventory transactions. Previously, it had used LIFO.






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Which of the following would not be accounted for using the retrospective approach?






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Which of the following would not be accounted for using the prospective approach?






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Which of the following changes in inventory costing usually should not be reported by revising the financial statements of prior periods?






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Which of the following changes should be accounted for using the retrospective approach?






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La Casita Restaurants changed from the FIFO method of inventory costing to the weighted average method during 2018. When reported in the 2018 comparat...






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B Company switched from the sum-of-the-years-digits depreciation method to straight-line depreciation in 2018. The change affects machinery purchased ...






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Blue Co. has a patent on a communication process. The company has amortized the patent on a straight-line basis since 2014, when it was acquired at a ...






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Orange Corp. constructed a machine at a total cost of $70 million. Construction was completed at the end of 2014 and the machine was placed in service...






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Retrospective restatement usually is appropriate for a change in: -Accounting Estimate -Accounting Principle a. Yes Yes b. Yes No c. No Yes d....






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For 2017, P Co. estimated its two-year equipment warranty costs based on $23 per unit sold in 2017. Experience during 2018 indicated that the estimate...






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Which of the following is a change in estimate?






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Which of the following is not a change in estimate?






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A change in the residual value of equipment is accounted for:






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Gore Inc. recorded a liability in 2018 for probable litigation losses of $2 million. Ultimately, $5 million in legitimate warranty claims were filed b...






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Which of the following is accounted for prospectively?






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The prospective approach usually is required for:






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Cooper Inc. took physical inventory at the end of 2017. Purchases that were acquired FOB destination were in transit, so they were not included in the...






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In December 2018, Kojak Insurance Co. received $500,000 in premiums for a two-year property insurance policy. The company recorded the transaction by ...






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During 2018, P Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2016 $1...