Accounting Changes and Error Corrections - Homework: Exercise 1. For each item below mark the appropriate box that indicates whether the item is an error or a change. Change in Error Principle Estimate Entity 1. Estimated warranty expense is increased from 2% to 3%. / 2. A company fails to accrue interest on a note payable. / 3. A corporation chooses to increase the estimated useful life of equipment from five years to ten years. / 4. Ending inventory is overstated. / 5. A division of a corporation is sold off and two new divisions are acquired. 6. A new pension standard, which significantly alters accounting for pensions, is adopted by a corporation. / 7. A company changes from weighted-average to LIFO inventory method. / 8. A corporation merges with another corporation, but retains the same name. / 9. A company changes from straight-line depreciation to double declining balance. / 10. A corporation changes the way in which it accounts for service contracts, but the change in method is inseparable from a change in estimate. /