Questions from Intermediate Accounting

Q: It’s not easy sometimes to distinguish between a change in principle and

It’s not easy sometimes to distinguish between a change in principle and a change in estimate. In these cases, how should the change be accounted for?

Q: For financial reporting, a reporting entity can be a single company

For financial reporting, a reporting entity can be a single company, or it can be a group of companies that reports a single set of financial statements. When changes occur that cause the financial st...

Q: With regard to the correction of accounting errors, what is the

With regard to the correction of accounting errors, what is the difference between U.S. GAAP and IFRS?

Q: In 2018, Adonis Industries changed its method of valuing inventory from

In 2018, Adonis Industries changed its method of valuing inventory from the average cost method to the FIFO method. At December 31, 2017, Adonis’s inventories were $47.6 million (average cost). Adonis...

Q: Refer to the situation described in BE 20–10. Assume

Refer to the situation described in BE 20–10. Assume the error was discovered in 2020, after the 2019 financial statements are issued. Ignoring income taxes, what journal entry will PKE use to correct...

Q: Compare the manner in which investing activities are reported on a statement

Compare the manner in which investing activities are reported on a statement of cash flows prepared by the direct method and by the indirect method.

Q: Where can we find authoritative guidance for the statement of cash flows

Where can we find authoritative guidance for the statement of cash flows under IFRS?

Q: Explain how each of the following liabilities would be classified in the

Explain how each of the following liabilities would be classified in the balance sheet: A note payable of $100,000 due in five years A note payable of $100,000 payable in annual installments of $20,00...

Q: Horton Housewares’ accounts receivable decreased during the year by $5 million

Horton Housewares’ accounts receivable decreased during the year by $5 million. What is the amount of cash Horton received from customers during the reporting period if its sales were $33 million? Pre...

Q: April Wood Products’ accounts receivable increased during the year by $4

April Wood Products’ accounts receivable increased during the year by $4 million. What is the amount of cash April Wood Products received from customers during the reporting period if its sales were $...