Reference no: EM131008573
The following questions dealing with accounting changes and errors are adapted from questions that previously appeared on Certified Management Accountant (CMA) examinations. The CMA designation sponsored by the Institute of Management Accountants (www.imanet.org) provides members with an objective measure of knowledge and competence in the field of management accounting. Determine the response that best completes the statements or questions.
1. A change in the liability for warranty costs requires
a. presenting prior-period financial statements as previously reported.
b. presenting the effect of pro forma data on income and earnings per share for all prior periods presented.
c. reporting an adjustment to the beginning retained earnings balance in the statement of retained earnings.
d. reporting current and future financial statements on the new basis.
2. In a review of the May 31, 2011, financial statements during the normal year-end closing process, it was discovered that the interest income accrual on Simpson Company's notes receivable was omitted. The amounts omitted were calculated as follows:
May 31, 2010 $ 91,800
May 31, 2011 100,200
The May 31, 2011, entry to correct for these errors, ignoring the effect of income taxes, includes a
a. credit to retained earnings for $91,800.
b. credit to interest revenue for $91,800.
c. debit to interest revenue for $100,200.
d. credit to interest receivable for $100,200.
3. An example of an item that should be reported as a prior-period adjustment in a company's annual financial statements is
a. a settlement resulting from litigation.
b. an adjustment of income taxes.
c. a correction of an error that occurred in a prior period.
d. an adjustment of utility revenue because of rate revisions ordered by a regulatory commission.
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Independent or paired samples
: For each of the following scenarios, say whether the data should be treated as independent or paired samples. Explain briefly. If paired, explain what the pairing involves.
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Independent or paired samples
: For each of the following scenarios, say whether the data should be treated as independent or paired samples. Explain briefly. If paired, explain what the pairing involves.
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What is the amplitude of the given function
: What is the amplitude of the function? What is the period of this function? If this graph represents a cosine function, then write an equation for the function.
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Observations of commuter traffic
: P-value. Have harsher penalties and ad campaigns increased seat-belt use among drivers and passengers? Observations of commuter traffic have failed to find evidence of a significant change compared with three years ago. Explain what the study's P-..
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The following questions dealing with accounting
: An example of an item that should be reported as a prior-period adjustment in a company's annual financial statements is : a. a settlement resulting from litigation. b. an adjustment of income taxes. c. a correction of an error that occurred in a pri..
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How much did each dog weigh
: At the pet fair, darlene's dog weighed 5 times as much as leah's doog. Together, the dogs weigh 84 pounds. How much did each dog weigh
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The cecil booker vending company changed its metho
: Prepare the 2011-2010 comparative income statements beginning with income from continuing operations. Include per share amounts.
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Problem regarding the house sales
: The realty company in Exercise 21b looks at a recent sample of houses that have sold. On testing the null hypothesis that 50% of the houses take more than three months to sell against the hypothesis that more than 50% of the houses take more than ..
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Pyramid construction company has used the completed contract
: Prepare the 2011-2010 comparative statements of shareholders' equity. (Hint: The 2009 statements reported retained earnings of $36,000. This is $60,000 - [$60,000 × 40%].
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