For Each of the Following Scenarios, Determine the Effects (If

question 74

Essay

For each of the following scenarios, determine the effects (if any)of the accounting change (correction of error, change in accounting policy, or change in estimate)on the relevant asset or liability, equity, and comprehensive income in the year of change and the prior year. Use the following table for your response. A. Company A increases the allowance for doubtful accounts (ADA). Using the old estimate, ADA would have been $71,000. The new estimate is $74,000.
B. Company B omitted to record an invoice for a $7,000 sale made on credit at the end of the previous year and incorrectly recorded the sale in the current year. The related inventory sold has been accounted for.
C. Company C changes its revenue recognition policy to a more conservative one. The result is a decrease in prior year revenue of $4,200 and a decrease in current-year revenue of $6,300 relative to the amounts under the old policy.

---

Definitions:

Extract Concessions

The act of obtaining something of value through negotiation or pressure, especially in a political or business context.

Negotiations

The process of discussing and reaching an agreement between parties with differing interests or perspectives, often involving compromise or conciliation.

Resource Mobilization Theory

A theory in social movements highlighting the importance of resources such as money, labor, and social connections for success.

Labor Unrest

Describes a situation where workers collectively express dissatisfaction with their employment conditions, often leading to strikes or protests.