When the IRS Requires a Taxpayer to Change Accounting Methods

question 54

Multiple Choice

When the IRS requires a taxpayer to change accounting methods:

• A) The taxpayer may be subject to penalties and interest.
• B) The taxpayer generally is required to make the change as of the beginning of the earliest open year.
• C) The adjustments due to the change cannot be spread over subsequent years.
• D) Only a. and b. are correct.
• E) a., b., and c. are correct.

Demonstrate the ability to prepare and analyze job cost sheets for tracking direct materials, direct labor, and applied overhead costs.

Understand the process of applying factory overhead to jobs using predetermined rates based on direct labor, direct material, or other bases.

Develop skills in the preparation of journal entries related to the job order cost accounting cycle, including transactions for materials, labor, overhead, and the sale of completed jobs.

Learn to compute and adjust for over- or underapplied overhead and its implications on financial reporting.

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