Question: Indicate with the appropriate letter the nature of each situatio

Indicate with the appropriate letter the nature of each situation described below:

Type of Change
PR Change in principle reported retrospectively
PP Change in principle reported prospectively
E Change in estimate
EP Change in estimate resulting from a change in principle
R Change in reporting entity
N Not an accounting change

_____1. Change from declining balance depreciation to straight-line.
_____2. Change in the estimated useful life of office equipment.
_____3. Technological advance that renders worthless a patent with an unamortized cost of $45,000.
_____4. Change from determining lower of cost or market for the inventories by the individual item approach to the aggregate approach.
_____5. Change from LIFO inventory costing to the weighted-average inventory costing.
_____6. Settling a lawsuit for less than the amount accrued previously as a loss contingency.
_____7. Including in the consolidated financial statements a subsidiary acquired several years earlier that was appropriately not included in previous years.
_____8. Change by a retail store from reporting bad debt expense on a pay-as-you-go basis to the allowance method.
_____9. A shift of certain manufacturing overhead costs to inventory that previously were expensed as incurred to more accurately measure cost of goods sold. (Either method is generally acceptable.)
_____10. Pension plan assets for a defined benefit pension plan achieving a rate of return in excess of the amount anticipated.

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  • CreatedJuly 11, 2013
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