John Pickens Writes Mystery Novels

question 13

Multiple Choice

John Pickens writes mystery novels. His publisher pays him royalties for the number of books sold each year. He is paid royalties for the first half of the year on September 30 and the second half of the year on March 31 of the following year. He received $42,000 in September, 2018. The publisher estimated that his royalties for the second half of the year would be $53,000. On March 31, 2019, he received $57,500. Assuming that he recorded $53,000 in royalties at December 31, 2018, what kind of change does this represent?

• A) not a change
• B) change in estimate
• C) prior period error correction
• D) change in accounting principle

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Definitions:

Criminal Suit

A legal action brought against an individual or organization accused of committing a crime.

Private Wrong

A legal injury or violation affecting an individual or a specific entity, as opposed to the public or society at large.

Tort Suit

A legal action enabling a person to seek damages against another for a wrongful act that caused harm or loss.

Criminal Actions

Legal proceedings brought by the state against individuals or entities accused of violating criminal laws.