The four types of accounting changes, including error correction, are:

Code

a. Change in accounting principle.

b. Change in accounting estimate.

c. Change in reporting entity.

d. Error correction.

Instructions

Following are a series of situations. You are to enter a code letter to the left to indicate the type of change. (18 points)

______ 1. Change from presenting nonconsolidated to consolidated financial statements.

______ 2. Change due to charging a new asset directly to an expense account.

______ 3. Change from expensing to capitalizing certain costs, due to a change in periods benefited.

______ 4. Change from FIFO to LIFO inventory procedures.

______ 5. Change due to failure to recognize an accrued (uncollected) revenue.

______ 6. Change in amortization period for an intangible asset.

______ 7. Changing the companies included in combined financial statements.

______ 8. Change in the loss rate on warranty costs.

______ 9. Change due to failure to recognize and accrue income.

______ 10. Change in residual value of a depreciable plant asset.

______ 11. Change from an unacceptable to an acceptable accounting principle.

______ 12. Change in both estimate and acceptable accounting principles.

______ 13. Change due to failure to recognize a prepaid asset.

______ 14. Change from straight-line to sum-of-the-years'-digits method of depreciation.

______ 15. Change in life of a depreciable plant asset.

______ 16. Change from one acceptable principle to another acceptable principle.

______ 17. Change due to understatement of inventory.

______ 18. Change in expected recovery of an account receivable.