Various types of accounting changes can affect the, Ask an Expert

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Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business enterprise.

1. A change from including the employer share of FICA taxes with payroll tax expenses to including it with "Retirement benefits" on the income statement.

2. Correction of a mathematical error in inventory pricing made in a prior period.

3. A change from presentation of statements of individual companies to presentation of consolidated statements.

4. A change in the method of accounting for leases for tax purposes to conform with the financial accounting method. As a result, both deferred and current taxes payable changed substantially.

5. A change from the FIFO method of inventory pricing to the LIFO method of inventory pricing.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9795591

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