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    Changes and Errors

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    (Accounting for Accounting Changes and Errors) Listed below are various types of accounting changes and errors.
    ?_____ 1. Change in a plant asset's salvage value.
    ?_____ 2. Change due to overstatement of inventory.
    ?_____ 3. Change from sum-of-the-years'-digits to straight-line method of depreciation.
    ?_____ 4. Change from presenting unconsolidated to consolidated financial statements.
    ?_____ 5. Change from LIFO to FIFO inventory method.
    ?_____ 6. Change in the rate used to compute warranty costs.
    ?_____ 7. Change from an unacceptable accounting principle to an acceptable accounting principle.
    ?_____ 8. Change in a patent's amortization period.
    ?_____ 9. Change from completed-contract to percentage-of-completion method on construction contracts.
    ?_____ 10. Change from FIFO to average-cost inventory method.
    Instructions
    For each change or error, indicate how it would be accounted for using the following code letters:
    1.Accounted for prospectively.
    2.Accounted for retrospectively.
    3.Neither of the above.

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    Solution Preview

    Dear Student,

    Thank you for using BM.
    Below are my answers.

    ANSWERS

    ?__1___ 1. Change in a plant asset's salvage value.
    ?__2__ 2. Change due to overstatement of inventory.
    ?__2___ 3. Change from ...

    Solution Summary

    Changes and Errors are denoted.

    $2.19

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