Which of the Following Is an Accounting Error

question 3

Multiple Choice

Which of the following is an accounting error?

• A)A company changes from the gross method to the net method of recording cash discounts.
• B)A private corporation previously using ASPE chooses to adopt IFRS.
• C)Costs not related to the construction of a building were included in the building cost.
• D)A patent was expected to provide protection of intellectual property for the full legal life of 20 years, but technological advances made the patent obsolete after only 12 years.

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Definitions:

Bankruptcy Law

Legal statutes and regulations governing the process whereby individuals or entities are unable to repay their debts and seek relief from some or all of their liabilities.

Revision

The process of altering, editing, or updating a document, text, or legislation to correct mistakes or make improvements.

Chapter 13

A section of the U.S. Bankruptcy Code allowing individuals with a steady income to reorganize their debts and pay them off over time.

Debts

Money, goods, or services owed by one party to another under the terms of a contract or agreement.