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Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business enterprise.

  1. A change from the completed-contract method to the percentage-of-completion method of accounting for long-term construction-type contracts.

  2. A change in the estimated useful life of previously recorded fixed assets as a result of newly acquired information.

  3. A change from deferring and amortizing preproduction costs to recording such costs as an expense when incurred because future benefits of the costs have become doubtful. The new accounting method was adopted in recognition of the change in estimated future benefits.

  4. A change from including the employer share of FICA taxes with payroll tax expenses to including it with "Retirement benefits" on the income statement.

  5. Correction of a mathematical error in inventory pricing made in a prior period.

  6. A change from presentation of statements of individual companies to presentation of consolidated statements.

  7. A change in the method of accounting for leases for tax purposes to conform with the financial accounting method. As a result, both deferred and current taxes payable changed substantially.

  8. A change from the FIFO method of inventory pricing to the LIFO method of inventory pricing.


Identify the type of change that is described in each item above and indicate whether the prior year's financial statements should be recast when presented in comparative form with the current year's financial statements.


Homework assistance for accounting students. How much assistance should accounting professors provide students for completing homework? Is too much assistance counterproductive? These were some of the questions of interest in a Journal of Accounting Education (Vol. 25, 2007) article. A total of 75 junior-level accounting majors who were enrolled in Intermediate Financial Accounting participated in an experiment. All students took a pretest on a topic not covered in class; then each was given a homework problem to solve on the same topic. However, the students were randomly assigned different levels of assistance on the homework. Some ( 20 students) were given the completed solution, some (25 students) were given check figures at various steps of the solution, and the rest ( 30 students) were given no help. After finishing the homework, each student was given a posttest on the subject. One of the variables of interest to the researchers was the knowledge gain (or, test score improvement), measured as the difference between the posttest and pretest scores. The sample mean knowledge gains for the three groups of students are provided in the table. The observed significance level of the tt-test of part e\mathbf{e} was reported as .1849. Using α=.05\alpha=.05, interpret this result.

No Solutions Check Figures Completed Solutions
Sample Size 30 25 20
Sample Mean 2.432.43 2.722.72 1.951.95


Answered 11 months ago
Answered 11 months ago
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In this exercise, we will be conducting the hypothesis testing by using tt-test of the two population means to determine if the test score improvement would decrease if the level of work assistance increased.

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