Bài kiểm tra chủ đề Chính sách kế toán, sự thay đổi ước tính kế toán và sai sót

Câu Hỏi 1
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Đoạn văn câu hỏi
A self-correcting error, discovered after the books are closed in the second year, still requires a
journal entry.
Select one:
True
False
Phản hồi
The correct answer is 'False'.
Câu Hỏi 2
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Self-correcting errors do not require any journal entries regardless of the length of time involved.
Select one:
True
False
Phản hồi
The correct answer is 'False'.
Câu Hỏi 3
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Miller Manufacturing purchased a packaging machine for $300,000 on January 2, 2015. The
seller assumed that the machine would be functional for at least five years with no salvage
value. In 2018, Miller decided that the machine would last an additional five years with a salvage
value of $25,000. The company uses straight-line depreciation for all assets. What amount of
depreciation should Miller record in 2018 and following years?
Select one:
A.
$60,000
B.
$19,000
Straight-line depreciation recorded beginning in 2015 is $300,000/ 5 years = $60,000/year. Accumulated

depreciation at the end of 2017 (3 years) is $180,000 and book value is $300,000 - $180,000 = $120,000.
Depreciation beginning in 2018 is ($120,000 book value - $25,000 salvage value)/5 years = $19,000.
C.
$30,000
D.
$55,000
Phản hồi
The correct answer is: $19,000
Câu Hỏi 4
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Đặt cờ
When the purchase of a material seven-year depreciable asset is recorded by debiting an
expense account, which one of the following statements is correct?
Select one:
A.
It is a self-correcting error and no adjustment is necessary.
B.
Since it affects only the income statement, no adjustment is required.
C.
The error will eventually self-correct, but the financial statements will be in error for seven years.
D.
If the company uses a rapid depreciation method, the error will self-correct quickly so no adjustment is
necessary.
Phản hồi
The correct answer is: The error will eventually self-correct, but the financial statements will be in error for
seven years.
Câu Hỏi 5
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Đặt cờ
JAT Corp. loaned $480,000 for three years to a major supplier on July 1, 2017. The note
stipulated 24% interest to be paid annually each June 30. Since this was an unusual
transaction, no one billed the supplier for the interest in 2018 or recorded the accrued interest at
the year-end (December). The supplier did not send in any interest in 2018. On March 1, 2019,
after the 2018 books were closed, the CFO found the error. Which one of the following is the
correct journal entry to correct the errors thru March 1, 2019? (Ignore income taxes.)
Select one:
A.
Since it has not been billed, no entry should be made until June 30, 2019.
B.
Interest Receivable 172,800

Interest Revenue 172,800
C.
Retained Earnings – Prior-Period Adjustment 172,800
D.

Phản hồi
Interest Revenue is computed as the principal amount times the interest rate times 2/12 months,
$480,000 × 24% × 2/12 = $19,200. Retained Earnings is credited for the interest revenue that should
have been recorded for 6 months of 2017 ($480,000 × 24% × 6/12 = $57,600) and 12 months in 2018
($480,000 × 24% × 12/12 = $115,200).
The correct answer is:

Câu Hỏi 6
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Đặt cờ
Butler Products decided to change inventory methods on January 1, 2020 to more effectively
report its results of operations. In the past, management has measured its ending inventories by
the average-cost method and they now believe that FIFO is a better representation of its
financial position and profitability. Butler's tax rate is 35% for all years.
Year Ended FIFO Inventory Average-Cost Inventory

December 31, 2018 $264,000 205,000
December 31, 2019 395,000 345,000
December 31, 2020 240,000 190,000
Which one of the following journal entries correctly records the change in the accounting
principle?
Select one:
A.
No entry needed.
B.
Deferred Tax Asset 32,500

Retained Earnings 17,500
Inventory 50,000
C.

Deferred Tax Asset 17,500
Inventory 50,000
D.
Inventory 50,000
Deferred Tax Liability 17,500
Inventory under FIFO is greater than average-cost by $ 395,000 - $345,000 = $50,000. Similarly, cost of
goods sold would have been lower by this same amount, resulting in an increase in net income and
retained earnings, adjusted by the deferred tax liability of $50,000 × 35% = $17,500.
Phản hồi
Inventory 50,000
Deferred Tax Liability 17,500
Câu Hỏi 7
Đúng
Đặt cờ
The bookkeeper for Phillips, Inc. mistakenly recorded a $300,000 one-year trade note
receivable as a long-term note receivable in 2017. Interest revenue was correctly recorded. The
error was discovered in 2019 by the company's auditors. What is the proper way to correct the
error?
Select one:
A.
Use a footnote disclosure only because it does not change working capital.
B.
Correct the classification in 2019 retrospectively for comparative balance sheets.
C.
Ignore the error because it is not material in amount.
D.
Correct the classification and adjust retained earnings for 2017 and 2018.
Phản hồi
The correct answer is: Correct the classification in 2019 retrospectively for comparative balance sheets.
Câu Hỏi 8
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John Pickens writes mystery novels. His publisher pays him royalties for the number of books
sold each year. He is paid royalties for the first half of the year on September 30 and the second
half of the year on March 31 of the following year. He received $42,000 in September, 2018.
The publisher estimated that his royalties for the second half of the year would be $53,000. On
March 31, 2019, he received $57,500. Assuming that he recorded $53,000 in royalties at
December 31, 2018, what kind of change does this represent?
Select one:
A.
change in accounting principle
B.
change in estimate
C.
prior period error correction
D.
not a change
Phản hồi
The correct answer is: change in estimate
Câu Hỏi 9
Đúng
Đặt cờ
Humphrey Contractors purchased customized equipment in January, 2017 for $620,000. The
manufacturer warranted the equipment for six years. Humphrey used double-declining balance
depreciation with a useful life of eight years and no salvage value. After two full years, he now
believes that the equipment will only last a total of five years. Compute his depreciation expense
for 2019 if he switches to straight-line depreciation. (Round any intermediate calculations to the
nearest cent and your final answer to the nearest dollar.)
Select one:
A.
$124,000
B.
$93,000
C.
$116,250
In the 2017, the company would have recorded double-declining balance depreciation of 2/8 × $620,000
= $155,000, leaving a book value of $465,000. In 2018, the company would record depreciation of 2/8 ×
$465,000 = $116,250 and the book value would be $348,750. Straight-line depreciation recorded
beginning in 2019 is $348,750 / 3 years = $116,250/year.
D.
$77,500
Phản hồi
Câu Hỏi 10
Đúng
Đặt cờ
A change in depreciation method is a change in estimate effected by a change in accounting
principle, and is accounted for prospectively.
Select one:
True
False
Phản hồi
The correct answer is 'True'.
Câu Hỏi 11
Sai
Đặt cờ
During 2017, a $50,000 loss on the sale of machinery was incorrectly recorded as a factory
equipment repair. The error was not discovered until the books were closed and the financial
statements were issued for 2018. What adjustment is necessary?
Select one:
A.
Record a correction to the books for 2017 and 2018 and recall prior financial statements.
B.
Since only income statement accounts are affected, make no entry to the books but recall the 2017
income statement.
C.
No adjustment is necessary to books or financial statements.
D.
Make no entry, but if $50,000 is a material amount, retrospectively adjust the 2017 comparative income
statement.
Phản hồi
The correct answer is: Make no entry, but if $50,000 is a material amount, retrospectively adjust the 2017
comparative income statement.
Câu Hỏi 12
Sai
Đặt cờ
Jett Company purchased an umbrella liability policy in January, 2017 and paid a five-year
premium for $400,000. It was recorded as Insurance Expense. The error was discovered late in
2017 when the accountants were reconciling 2017 for adjusting entries. What is the proper entry
to correct the error at December 31, 2017? (Ignore income taxes.)
Select one:
A.
No entry required because it will self-correct in two more years.
B.
Prepaid Insurance 240,000

Insurance Expense (2017) 80,000
C.

Insurance Expense 320,000
D.

Insurance Expense (2017) 80,000
Phản hồi
Since the books are not closed, an entry is needed to correct the current–year income statement and
balance sheet accounts. Of the total $400,000 paid, $80,000 is attributable to Insurance Expense for the
year. Insurance Expense, therefore, needs to be reduced from $400,000 to $80,000, a credit of $320,000.
Prepaid Insurance of $320,000, the amount that is still prepaid at the end of the year, should be recorded
with a debit.

Insurance Expense 320,000
Câu Hỏi 13
Đúng
Đặt cờ
When a firm decides to change an accounting principle, but does not have sufficient information
to use the retrospective approach, it may ________.
Select one:
A.
be forced to abandon the change
B.
estimate the numbers to do so
C.
declare the change to be impractical
D.
use the prospective approach
Phản hồi
The correct answer is: use the prospective approach
Câu Hỏi 14
Đúng
Đặt cờ
Firms account for material error corrections ________.
Select one:
A.
using the prospective method
B.
with the retrospective method
C.
only after they self-correct
D.
only when both the income statement and balance sheet are affected
Phản hồi
The correct answer is: with the retrospective method
Câu Hỏi 15
Đúng
Đặt cờ
Which one of the following would not be a required disclosure for a change in accounting
principle?
Select one:
A.
management's justification for the change
B.
description of the nature of the change
C.
the estimated effect on future earnings per share
D.
cumulative effect of the change on retained earnings for the first year presented
Phản hồi
The correct answer is: the estimated effect on future earnings per share
Câu Hỏi 16
Đúng
Đặt cờ
Retrospective changes require restatement of all periods reported in the annual report as if it
had been used in those prior years.
Select one:
True
False
Phản hồi
The correct answer is 'True'.
Câu Hỏi 17
Sai
Đặt cờ
When an income statement error that does not affect the balance sheet is not found until after
the books are closed, an entry ________.
Select one:
A.
is not necessary, but financial statements must be recalled immediately
B.
is not necessary, but the income statement must be corrected before issue
C.
must be made to correct the error during the next year
D.
must be made to correct the error by reopening the books
Phản hồi
The correct answer is: is not necessary, but the income statement must be corrected before issue
Câu Hỏi 18
Đúng
Đặt cờ
Butler Products decided in 2020 to change inventory methods to more effectively report its
results of operations. In the past, management has measured its ending inventories by the
average-cost method and they now believe that FIFO is a better representation of its
profitability.
Year Ended FIFO Inventory Average-Cost Inventory

December 31, 2018 $250,000 $195,000
December 31, 2019 390,000 329,000
December 31, 2020 240,000 190,000
Ignoring income tax, which one of the following journal entries correctly records the change in
the accounting principle at January 1, 2020?
Select one:
A.
No journal entry needed for a prospective application of the change in principle.
B.

Inventory 61,000
C.
Inventory 56,000
D.
Inventory 61,000
retained earnings.
Phản hồi
retained earnings.
retained earnings.
Inventory 61,000
Câu Hỏi 19
Sai
Đặt cờ
Jenkins, Inc. builds custom machines for manufacturers using robotic equipment. In 2018, the
company decided to change from straight-line to double-declining balance depreciation for its
robotic equipment. It changed the life expectancy as follows:
Original cost of robotic equipment $2,800,000

Accumulated depreciation thru 2017 860,000
Original life in years 8
Remaining life in years 4
Determine the correct amount of depreciation to expense for 2018.

Select one:
A.
$350,000
B.
$430,000
C.
$970,000
D.
$485,000
Phản hồi
Book value at the end of 2017 is $2,800,000 - 860,000 = $1,940,000. Double-declining balance
depreciation for 2018 is book value $1,940,000 × 2/4 = $970,000.
Câu Hỏi 20
Sai
Đặt cờ
Which of the following is not an estimate that might be revised as a natural part of the
accounting process?
Select one:
A.
salary expense
B.
pension expense
C.
bad debt expense
D.
depreciation expense
Phản hồi
The correct answer is: salary expense

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Câu Hỏi 1

Straight-line depreciation recorded beginning in 2015 is $300,000/ 5 years = $60,000/year. Accumulated

Interest Receivable 172,800

Interest Receivable 192,000

Interest Receivable 192,000

Year Ended FIFO Inventory Average-Cost Inventory

Deferred Tax Asset 32,500

Retained Earnings 32,500

Prepaid Insurance 240,000

Prepaid Insurance 320,000

Prepaid Insurance 160,000

Prepaid Insurance 320,000

Year Ended FIFO Inventory Average-Cost Inventory

Retained Earnings 61,000

Original cost of robotic equipment $2,800,000

Determine the correct amount of depreciation to expense for 2018.

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