Question

Can anyone write an introduction about the textbook "INTERMEDIATE ACCOUNTING II" Ninth edition chapter 20: Accounting changes and error corrections, and conclusion such as a power point. (Want to explain like the presentation.) Thanks.

Answer 1

1) Introduction about intermediate Accounting?

Introduction: Generally accounitng stands for to be record the financial transactions then summarising, analysing and interpreting the results.

generally accounting steps are like : BOOK KEEPING --- LEDGER OR SUBSIDIARY BOOKS --- TRAIL BALANCE ---- TRADING ACCOUNT ----PROFIT & LOSS ACCOUNT ---- BALANCE SHEET

2) EXPLAIN ABOUT ACCOUNTING CHANGES AND ERRORS AND CONCLUSION?

Company every year evaluate the financial performance. Its is differe form one year to anothe year because of financial performance are impact on economic reforms, law, accounitng methods, errors, etc. if incresed errors then its impact on financial performance.

if any Indian company then followed by GAAP norms, if US company followed by US GAAP norms, if MNC company then followed by IFRS, So any company then implement accounitng polocies are followed by what ever guiding, if any changes then compulsory inform to concern board.

as per GAAP given following direction for changes in accouniting methods

1. change in accounting priniciple: a changes from one principle to another accounitng principle like if any company move form GAAP principle to IFRS principles.

2. changes in accouninting Estimate: a change in a prior estimate resulting from additional information, more expensive or a new event.

3. changes in reporting entity: a change in the entity being reported such as a change in the subsidiaries included in a company consolidated financial statements.

Accounting for a correction of an error:

1. Errors include mathematical mistakes, mistakes in application principles,or international misstatements of accounintg records

2. the correction of an error if reflected as an adjustment to the begining balance of a companys retained earnings for each period ( with corresponding adjustments to the carrying values of assets and liabelities that are affected by the error) this method is similar to the retrospective application of a new accounitng priniciple.

3. Errors are affecting both the income statement and balanccesheet can be classified as counterbalancing and noncounterbalancing.counterbalancing errors are automatically corrected in the next accounitng period as a natural part of the accounting process.