Practice: Accounting Changes & Error Corrections Quiz Quiz | Financial Accounting & Reporting (FAR)

Question 1

Which of the following is considered a change in accounting principle?

Answer

Changing the estimated useful life of equipment

Answer

Changing from FIFO to weighted-average inventory costing

Answer

Correcting a mathematical error

Answer

Changing the reporting period

Question 2

Under U.S. GAAP, a change in accounting principle is generally reported using:

Answer

Prospective application

Answer

Current-period recognition only

Answer

Retrospective application

Answer

Deferred recognition

Question 3

Which of the following is a change in accounting estimate?

Answer

Revising the estimated useful life of machinery

Answer

Changing inventory costing from FIFO to weighted-average

Answer

Correcting an omitted accrued expense

Answer

Changing the entities included in consolidated statements

Practice Quiz