Indicate the Nature of Each of the Situations Described Below

question 84

Essay

Indicate the nature of each of the situations described below using the following three-letter code.
CODE DESCRIPTION
CPR: Change in principle reported retrospectively
CPP: Change in principle reported prospectively
CES: Change in estimate
CRE: Change in reporting entity
PPA: Prior period adjustment required
____ Change from FIFO inventory costing to LIFO inventory costing.
____ Change from LIFO inventory costing to FIFO inventory costing.
____ Change in the composition of a group of firms reporting on a consolidated basis.
____ Change to the installment method of accounting for receivables.
____ Change in actuarial assumptions for a defined benefit pension plan.
____ Change from sum-of-the-years' digits depreciation to straight-line.
____ Change from expensing extraordinary repairs erroneously recorded as an expense to
capitalizing the expenditures.
____ Change in the percentage used to determine warranty expense.
____ Change from reporting the equity method for investments to the cost method.
____ Change in the residual value of machinery.

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Definitions:

Substitute Choices

Options available that can replace or serve as alternatives to others, usually in the context of consumer goods or services.

Small Business Owner

An individual who owns and operates a business that is smaller in scale in terms of revenues, employees, and operations.

Economy Of Scale

The cost advantage achieved by companies when production becomes efficient, as fixed costs are spread out over more units of output.

High Shrinkage

A term used in retail to describe a higher than normal reduction in inventory due to factors like theft, damage, or errors.