Questions from Advanced Accounting

Q: Is a correction of an error in the financial statements considered an

Is a correction of an error in the financial statements considered an accounting change?

Q: A company changed its method of accounting for inventory and determined that

A company changed its method of accounting for inventory and determined that it was impractical to determine the cumulative effect for all prior periods. The company decided to use the new method on a...

Q: Describe the equity method for accounting for investments. In order to

Describe the equity method for accounting for investments. In order to qualify for the equity method, describe the conditions that must be met.

Q: Suppose that a company accounts for an investment using the equity method

Suppose that a company accounts for an investment using the equity method. Describe the appropriate accounting if the combined loss reported by the investee exceeds the investor’s balance in the inves...

Q: Can a firm choose a fair value option for reporting some of

Can a firm choose a fair value option for reporting some of its investments on the balance sheet? If so, describe the conditions that must be met.

Q: On January 1, 2012, Perez Company purchased 90% of

On January 1, 2012, Perez Company purchased 90% of the capital stock of Sanchez Company for $85,000. Sanchez Company had capital stock of $70,000 and retained earnings of $12,000 at that time. On Dece...

Q: You are writing a research paper on the accounting for treasury stock

You are writing a research paper on the accounting for treasury stock. You wonder if it is possible to treat treasury stock as an asset. If not, you wonder if, over the history of GAAP, it has ever be...

Q: Management changed an accounting method. Several executives would have qualified for

Management changed an accounting method. Several executives would have qualified for additional bonuses totaling $50,000 in the prior year under the new method. Can the firm restate the previous year’...

Q: What is the objective of the statement of cash flows?

What is the objective of the statement of cash flows?

Q: FASB Statement No. 142 changed the guidance for goodwill and other

FASB Statement No. 142 changed the guidance for goodwill and other intangibles. List all the topics in the Codification where this information can be found (i.e., ASC XXX). (Hint: There are two gener...