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NEW QUESTION: 1
Steel shot grit contaminated with oil or grease used in a cetrifugal blast cleaning should be
A. disposed of properly.
B. mixed with uncontaminated abrasive
C. washed with clean potable water prior to Use.
D. run through the air wash separator.
Answer: A
NEW QUESTION: 2
On January 2, 1993, Quo, Inc. hired Reed to be its controller. During the year, Reed, working closely with
Quo's president and outside accountants, made changes in accounting policies, corrected several errors
dating from 1992 and before, and instituted new accounting policies.
Quo's 1993 financial statements will be presented in comparative form with its 1992 financial statements.
This question represents one of Quo's transactions. List B represents the general accounting treatment
required for these transactions. These treatments are:
. Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the
accounting change or error correction in the 1993 financial statements, and do not restate the 1992
financial statements.
. Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust
1 992 beginning retained earnings if the error or change affects a period prior to 1992.
. Prospective approach - Report 1993 and future financial statements on the new basis but do not restate
1 992 financial statements.
Item to Be Answered
Quo sells extended service contracts on its products. Because related services are performed over
several years, in 1993 Quo changed from the cash method to the accrual method of recognizing income
from these service contracts.
List B (Select one)
A. Cumulative effect approach.
B. Prospective approach.
C. Retroactive or retrospective restatement approach.
Answer: C
Explanation:
Choice "B" is correct. If comparative FS are issued, restate prior year's FS. If comparative FS are not
issued, restate prior year-end's retained earnings account by "adjusting" (net of tax) the opening balance
of the current retained earnings statement. Note that when an error is corrected, retroactive restatement is
used, and when there is a change in accounting principle, retrospective restatement is done. However,
this is only a difference in terminology.
NEW QUESTION: 3
Welche Aussage über die Schritte zur Erfüllung einer Serviceanfrage ist RICHTIG?
A. Sie sollten kurz und einfach sein
B. Sie sollten komplex und detailliert sein
C. Sie sollten die Behandlung von Vorfällen einschließen
D. Sie sollten bekannt und bewährt sein
Answer: D