Which of following is not a change in accounting principle

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Reference no: EM13494451

Changes and Error Analysis

 

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

a.

A change from FIFO to LIFO for inventory valuation

b.

A change from completed-contracts to percentage-of-completion

c.

A change from eight years to five years in the useful life of a depreciable asset

d.

A change from double-declining-balance to straight-line depreciation

 

A company changes from an accounting principle that is not generally accepted to one that is generally accepted. The effect of the change should be reported as a

a.

change in accounting principle.

b.

change in accounting estimate

c.

correction of an error.

d.

change of accounting estimate effected by a change in accounting principle.

 

Which of the following is the proper time period in which to record a change in accounting estimate?

a.

Current period and future periods

b.

Current period and retroactively

c.

Retroactively only

d.

Current period only

 

Wolverine Corporation purchased a machine for $132,000 on January 1, 2008, and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 1, 2011, Wolverine determined that the machine had a useful life of six years from the date of acquisition and will have a salvage value of $12,000. A change in estimate was made in 2011 to reflect these additional data. What amount should Wolverine record as the balance of the accumulated depreciation account for this machine at December 31, 2011?

a.

$73,000

b.

$77,000

c.

$61,250

d.

$63,600

 

 Which of the following types of errors will not self-correct in the next year?

a.

Accrued expenses not recognized at year-end

b.

Accrued revenues that have not been collected not recognized at year-end

c.

Depreciation expense overstated for the year

d.

Prepaid expenses not recognized at year-end

 

 

Reference no: EM13494451

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