Reference no: EM132494490

Question 1: In the blank to the left of each statement, fill in the letter from the following list which best describes the treatment of the item on the financial statements of Sora Inc. for the current year ending December 31, 2019:

a. Change in accounting policy requiring retrospective application

b. Change in estimate

c. Correction of error

d. None of the above

________1. In 2019, the company changed its method of recognizing income from the completed-contract method to the percentage-of-completion method.

_________2. At the end of 2019, an audit revealed that the corporation's allowance for doubtful accounts was too large and should be reduced to 2%. When the audit was performed in 2018, the allowance seemed appropriate.

________3. Depreciation on a truck, acquired in 2018, was understated because the service life had been overestimated. The understatement had been made in order to show higher net income in 2018 and 2019.

________4. The company switched from average cost to FIFO inventory costing during be able to match each statement from the following list which describes it