For Each of the Following Situations, Determine the Accounting Method

question 54

Essay

For each of the following situations, determine the accounting method that should be employed.
$$\begin{array} { | l | l | } \hline \text { Type of Accounting Changes } & \text { Accounting Methods } \\\hline \text { Change in Principle } & \\\hline \text { Change in Estimate } & \\\hline \text { Change in Entities } & \\\hline \text { Change in Accounting Estimate } & \\\text { effected by a Change in } & \\\text { Accounting Principle } & \\\hline\end{array}$$

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Definitions:

Budgeting

The process of creating a plan to spend money, setting forth projections for revenues and expenses over a certain period of time.

Activity Variance

The difference between what was expected in terms of spending or usage during a period and what actually occurred.

Administrative Expenses

Costs associated with the general administration of a business, including items like salaries of executives, office supplies, and utilities.

Budgeting

Constructing a scheme to allocate your funds, specifying forthcoming financial ambitions and the tactics to achieve these goals.