In reviewing the December XXXXXXXXXX, inventory, DAVIS corporation discovered errors in its...

Question

In reviewing the December XXXXXXXXXX, inventory, DAVIS corporation discovered errors in its inventory taking procedures that have caused inventories for the last three years to be incorrect as follows.........................

Robert · Accepted Answer

#3 
a) Is this a change in accounting principle, a change in accounting estimate or an error in the financial 
statement? 
Since inventory values have been incorrectly stated, these are an error 
b) What is the proper accounting treatment for this situation? Cite the authoritative guidance. 
. FASB Statement No. 154 requires that a company account for the correction of material error made in 
previous periods as a prior period restatement (adjustment).

In reviewing the December XXXXXXXXXX, inventory, DAVIS corporation discovered errors in its inventory taking procedures that have caused inventories for the last three years to be incorrect as...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment