Accounting for accounting changes and errors listed below

Question

Accounting for Accounting Changes and Errors

Listed below are various types of accounting changes and errors.

• Change in a plant asset's salvage value.
• Change due to overstatement of inventory.
• Change from sum-of-the-years'-digits to straight-line method of depreciation.
• Change from presenting unconsolidated to consolidated financial statements.
• Change from LIFO to FIFO inventory method.
• Change in the rate used to compute warranty costs.
• Change from an unacceptable accounting principle to an acceptable accounting principle.
• Change in a patent's amortization period.
• Change from completed-contract to percentage-of-completion method on construction contracts.
• Change from FIFO to average-cost inventory method.

Instructions

For each change or error, indicate how it would be accounted for using the following code letters:

1. Accounted for prospectively.
2. Accounted for retrospectively.
3. Neither of the above.