Complete the Following Table by Selecting the Appropriate Type of Change

question 61

Essay

Complete the following table by selecting the appropriate type of change and the accounting method appropriate for each event.
$\begin{array}{|l|l|l|}\hline\text{ Event } & \text{Type of Change} &\text{ Accounting Method} \\\hline\text{ Change from FIFO to LIFO. }& & \\\hline \text{Change in the warranty expense} & & \\\text{provision. }& & \\\hline \text{Multi-year insurance policy }& & \\\text{charged to insurance expense. }& & \\\hline\text{ Change from percentage-of- }& & \\\text{completion to completed- }& & \\\text{contract to method. }& & \\\hline\text{ Patent not amortized because it} & & \\\text{is not expected to decline in }& & \\\text{value. }& & \\\hline \text{Purchase of a new subsidiary }& & \\\text{with \( 60 \% \) ownership that is }& & \\\text{three years old. }& & \\\hline\text{ Change from reporting} & & \\\text{inventory from the aggregate} & & \\\text{method to the individual item }& & \\\text{method.} & & \\\hline\text{ Change from writing off bad }& & \\\text{debts as they become} & & \\\text{uncollectible to the allowance} & & \\\text{method. }& & \\\hline\text{ Change in the life and salvage} & & \\\text{value of a depreciable asset.} & & \\\hline\text{ Failure to record the correct} & & \\\text{ending inventory balance.} & & \\\hline \text{Change from straight-line to }& & \\\text{declining balance depreciation. }& & \\\hline\end{array}$

Analyze the impact of changes in sales volume, costs (fixed and variable), and price on profit.

Calculate and interpret the margin of safety and its significance in business decision-making.

Apply critical thinking to assess the impact of pricing decisions on net income and break-even points.

Understand variable costing, including how changes in production level affect financial outcomes.

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Definitions:

Incentive Obstacles

Factors that hinder the effectiveness or implementation of incentive programs designed to motivate specific behaviors or outcomes.

Information Processing Obstacle

Challenges faced in capturing, processing, storing, and disseminating information that can impede efficient decision-making and operations in an organization.

Forecast

A prediction or estimate of future events or trends, particularly regarding weather, market conditions, or sales figures.

Statistics

Statistics is the branch of mathematics dealing with the collection, analysis, interpretation, and presentation of masses of numerical data, used for making decisions and predicting trends.