Charges in accounting estimates are
charges in accounitng estimates are called provisions or reserves which are created to set aside the amount to be used for a particular purpose.
Which of the following is true of accounting for changes in accounting estimates O Changes in estimates are not carried back to prior years. None of the answers are correct. Changes in estimates have no impact on the financial statements. Changes in estimates are considered errors. O A company recognizes a change in estimate by making a retrospective adjustment to the financial statements QUESTION 12 Accounting information is considered to be relevant when it can be depended on to represent...
Question One IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors is applied in selecting and applying accounting policies, accounting for changes in estimates and reflecting corrections of prior period errors. Required: a) Explain the basis on which the management of an entity must select its accounting policies and (02 marks) b) Distinguish, with an example, between changes in accounting policies and changes in accounting estimates. (03 marks)
Question 15 Accounting estimates (such as the allowance for doubtful accounts) are especially susceptible to management bias. True False Question 16 Accounting estimates are rarely ever used as a means for management to manage or misstate earnings. True False
Changes in asset lives and salvage values are changes in accounting: estimates and are applied prospectively. principle and are applied retrospectively. estimates and are applied retrospectively.
Changes in accounting estimates are: Multiple Choice Ο Considered accounting errors. Ο Reported as prior period adjustments. Ο Accounted for with a cumulative "catch-up" adjustment. Ο Extraordinary items. Ο Accounted for in current and future periods.
2) Compare and contrast the accounting treatment for error corrections, changes in estimates, and changes in accounting principles. Include examples to illustrate how each of these changes should be reported.
Preferably, a financial analyst estimates cash flows for a project as a. accounting profits after taxes. b. cash flows before taxes. c. accounting profits before taxes. d. cash flows after taxes.
Accounting reports merely provide a record of past transactions and do not reflect management estimates and forecasts of the future. True False
How does the accounting treatment for changes in principle, changes in estimates, and errors differ? Within the answer for errors describe prior period adjustments.
Suppose you are the manager of a firm. The accounting department has provided cost estimates, and the sales department sales estimates, on a new product. Analyze the data they give you, determine what it will take to break even, and decide whether to go ahead with production of the new product. The product has a production cost function C(x)-90x + 4,410 and a revenue function R(x) 120x. The break-even quantity isunits