CHAPTER 9

Accounting for Long Term Construction Contract Change in Accounting Policy

Accruals are counter balancing error Take Note

Addition to noncurrent assets Disclosed if regularly provided to the chief

operating decision maker

Advertising Independent View/Not Allocated

Advertising No anticipation/ recognized when they

occur/Expensed outright

Amount of correction at the beginning of the earliest Prior Disclosure of Prior Period Errors
Period Presented

Amount of Correction for each prior period presented, for Disclosure of Prior Period Errors
basic and diluted EPS

Amount of Correction for each prior period presented, for Disclosure of Prior Period Errors
each FS line item presented

Application of a new Accounting Policy which did not occur Not Changes in Accounting Policy
previously

Application of an Accounting Policy for events which differ in Not Changes in Accounting Policy
substance

Asset acquisition planned for later No anticipation/ recognized when they

occur/Expensed outright

Asset disposition planned for later No anticipation/ recognized when they

occur/Expensed outright

Bad Debts Change in Accounting Estimate

Bonus has a reliable estimate of the obligation Anticipate/ allocated

Bonus is a legal obligation Anticipate/ allocated

Capitalization to expense method of developmental cost Prior Period Error

Car parts segment Disclosure about type of product segment

Cash basis to accrual basis of accounting Prior Period Error

Change from cost model to fair value model in measuring Change in Accounting Policy
Investment Property

Change in inventory method pricing Change in Accounting Policy

Change in the method of accoutning LT construction contract Change in Accounting Policy

Change to a new policy - requirement of a new PRFS Change in Accounting Policy

Changin Specific Subsidiaries Change in Accounting Policy

Changing from what is not acceptable to what is acceptable Prior Period Error

Changing specific subsidiaries Change on Reporting Entity/ Change in

Accounting Policy

Corporate Headquarters Not an Operating Segment

Correcting from what is not acceptable to what is acceptable Prior Period Error

Cost recovery is not counter balancing Take Note

Depreciation Integral View/Allocated

Depreciation and amortization Anticipate

Depreciation and amortization/included in segment P and L Disclosed if regularly provided to the chief
operating decision maker

Depreciation Method/ Change in Depreciation Change in Accounting Estimate

Description of how and from where the error has been Disclosure of Prior Period Errors
corrected

Dividend Revenue No anticipation/ recognized when they

occur/Expensed outright

Donations Independent View/Not Allocated

Doubtful Accounts Change in Accounting Estimate

Enforceable as legal commitments Anticipate/ allocated

Failure to record expense Prior Period Error

Failure to record income Prior Period Error

Fair Value of the asset Change in Accounting Estimate

Fair value of the Liability Change in Accounting Estimate

Fraud Prior Period Error

Gain and loss No anticipation/ recognized when they

occur/Expensed outright

Government Grant No anticipation/ recognized when they

occur/Expensed outright

If retrospective is impracticable for a particular prior period Disclosure of Prior Period Errors

Imapairment Loss Disclosed if regularly provided to the chief

operating decision maker

Income tax expense/included in segment P and L Disclosed if regularly provided to the chief
operating decision maker

Initial Adoption of Policy to carry assets at revalued amount Change in Accounting Policy

Interest Expense Disclosed if regularly provided to the chief

operating decision maker

Interest Expense/included in segment P and L Disclosed if regularly provided to the chief

operating decision maker

Interest Revenue Disclosed if regularly provided to the chief

operating decision maker

Interest Revenue/included in segment P and L Disclosed if regularly provided to the chief

operating decision maker

Intersegment Sales/included in segment P and L Disclosed if regularly provided to the chief

operating decision maker

Inventory is counter balancing error Take Note

Inventory Obsolescence Change in Accounting Estimate

Irregular cost No anticipation/ recognized when they

occur/Expensed outright

Material items if income and expense as required by PAR 97 Disclosed if regularly provided to the chief
of PAS1/included in segment P and L operating decision maker

Material Noncash items other than depreciation and Disclosed if regularly provided to the chief
amortization/included in segment P and L operating decision maker

Mathematical Mistakes Prior Period Error

Misinterpretation of facts Prior Period Error

Misstatement of depreciation cost Prior Period Error

Mistakes in applying accounting policies Prior Period Error

Motor vessels segment Disclosure about type of product segment

Nature of Prior Period Error Disclosure of Prior Period Errors

Ordinary Repairs to equipment No anticipation/ recognized when they

occur/Expensed outright

Overhaul No anticipation/ recognized when they

occur/Expensed outright

Oversight Prior Period Error

Overstated Ending Deduct Retained earnings/debit

Overstated Ending Expense Add Retained earnings/credit

Overstated Ending Income Deduct Retained earnings/debit

Overstated Ending Inventory Deduct Retained earnings/debit

Overstatement Prior Period Error

Paid vacation and holiday leave Anticipate/ allocated

Percentage of completion is not counter balancing Take Note

Prepaid Integral View/Allocated

Prepaid Insurance Integral View/Allocated

Prepaid is counter balancing error Take Note

Profit or loss Disclosed under all circumstances

Property taxes Anticipate/ allocated

Provision of Warranty Anticipate/ allocated

Repair and Maintenance Independent View/Not Allocated

Repair and Maintenance No anticipation/ recognized when they occur

Residual value Change in Accounting Estimate

Revaluation in accordance of PAS 16 Change in Accounting Policy

Revenue form External Customers/included in segment P and Disclosed if regularly provided to the chief
L operating decision maker

Revenue from transactions with operating segments of the Disclosed if regularly provided to the chief
same entity/included in segment P and L operating decision maker

Royalties No anticipation/ recognized when they

occur/Expensed outright

sales -external and internal Disclosed if regularly provided to the chief

operating decision maker

Seasonal, cyclical or occasional revenue No anticipation/ recognized when they

occur/Expensed outright

Software segment Disclosure about type of product segment

The entity's interest in the profit or loss of associate and joint Disclosed if regularly provided to the chief
venture accounted for by the equity method/included in operating decision maker
segment P and L
Total assets Disclosed if regularly provided to the chief
operating decision maker

Total Liabilities Disclosed if regularly provided to the chief

operating decision maker

Understated Ending Add Retained earnings/credit

Understated Ending Expense Deduct Retained earnings/debit

Understated Ending Income Add Retained earnings/credit

Understated Ending Inventory Add Retained earnings/credit

Understatement Prior Period Error

Unearned Integral View/Allocated

Uneven Cost Anticipate/ allocated

Useful life Change in Accounting Estimate

Utilities Integral View/Allocated

Warranty Cost Change in Accounting Estimate

 Chapter 14
Cash Basis Accrual Basis
Accrued Salaries Payable Yes
Acrued Interest Receivable Yes
Bad Debts/Doubtful Accounts Yes
Cash Purchases Yes Yes
Cash Sales Yes Yes
Collections from customer Yes
Depreciation Yes Yes
Ending Inventory Yes (deduct) Yes (deduct)
Equipment Depreciated Depreciated
Interest Received Yes Yes
Items Earned/Receivable Yes
Items Incurred/Payable Yes
Items Paid Yes
Items Received Yes
Office Supplies Paid Yes Yes
Office Supplies unusesd Yes
Other Expenses Paid Yes Yes
Payment to trade Creditors Yes
Purchases on Account Yes
Salaries Paid Yes Yes
Sales on Account Yes
 Cash Basis to Accrual Basis (reverse if accrual to cash)
Accounts Payable - beginning Purchases (minus) - Sales (add)
Accounts Payable - end Purchases (add) - Sales (minus)
Accounts Receivable - beg Sales (minus)
Accounts Receivable - end Sales (add)
Accounts Receivable Written off Sales (add)
Accrued Expenses - beg Expenses (minus)
Accrued Expenses - end Expenses (add)
Accrued Income - beg Income OTS (minus)
Accrued Income - end Income OTS (add)
Accrued interest payable - beg Expenses (minus)
Accrued interest payable - end Expenses (add)
Accrued Interest Receivable - beg Income OTS (minus)
Accrued Interest Receivable - end Income OTS (add)
Accrued rental payable - beg Expenses (minus)
Accrued rental payable - end Expenses (add)
Accrued Rental Receivable - beg Income OTS (minus)
Accrued Rental Receivable - end Income OTS (add)
Accrued royalties payable - beg Expenses (minus)
Accrued royalties payable - end Expenses (add)
Accrued Royalties Receivable - beg Income OTS (minus)
Accrued Royalties Receivable - end Income OTS (add)
Accrued Salaries payable - beg Expenses (minus)
Accrued Salaries payable - end Expenses (add)
Accrues Expenses - end Expenses (add)
Advances from customers (deferred rev) - beg Sales (add)
Advances from customers (deferred rev) - end Sales (minus)
Carrying amount of equipment sold Depreciation (minus)
Cash disbursement - equipment Depreciation (add)
Cash Purchases Purchases (add)
Cash Sales Sales (add)
Collection of Accounts Receivable Sales (add)
Collections from customers Sales (add)
Collections of Notes Receivable Sales (add)
Collections of Trade Receivables Sales (add)
Deferred Income - beginning Income OTS (add)
Deferred Income - end Income OTS (minus)
Deposited by customer Sales (minus)
Equipment - beg Depreciation (add)
Equipment - end Depreciation (minus)
Income Received - cash basis Income OTS (add)
Investment - beg Gain or loss on sale (minus)
Investment - end Gain or loss on sale (add)
Notes Payable - beginning Purchases (minus)
Notes Payable - end Purchases (add)
Notes Receivable - beginning Sales (minus)
Notes Receivable - end Sales (add)
Notes receivable discounted Sales (add)
Notes Receivable written off Sales (add)
Payment of Accounts Payable Purchases (add)
Payment of Notes Payable Purchases (add)
Payment of Trade Notes Payable Purchases (add)
Payment of Trade Payables Purchases (add)
Prepaid Expenses - beg Expenses (add)
Prepaid Expenses - end Expenses (minus)
Prepaid Insurance - beg Expenses (add)
Prepaid Insurance - end Expenses (minus)
Prepaid interest - beg Expenses (add)
Prepaid interest - end Expenses (minus)
Prepaid interest on notes - beg Expenses (add) - separate
Prepaid interest on notes - end Expenses (minus) - separate
Prepaid Rent - beg Expenses (add)
Prepaid Rent - end Expenses (minus)
Prepaid royalties - beg Expenses (add)
Prepaid royalties - end Expenses (minus)
Prepaid salaries - beg Expenses (add)
Prepaid salaries - end Expenses (minus)
Prepaid taxes - beg Expenses (add)
Prepaid taxes - end Expenses (minus)
Purchase Allowances Purchases (add)
Purchase Discounts Purchases (add)
Purchase Returns Purchases (add)
Sale Price Gain or loss on sale (add)
Sales allowances Sales (add)
Sales Discount Sales (add) and NET Sales (minus)
Sales Return Sales (add) and NET Sales (minus)
Trade Payable - beginning Purchases (minus)
Trade Payable - end Purchases (add)
Trade Receivable - beginning Sales (minus)
Trade Receivables - end Sales (add)
Uncollectible Rent Written off Income OTS (add)
Unearned Interest Income - beg Income OTS (add)
Unearned Interest Income - end Income OTS (minus)
Unearned Rental Income - beg Income OTS (add)
Unearned Rental Income - end Income OTS (minus)
Year-end credit adjustment to expense Expenses (add)
 Chapter 15

Additional Investments Net Income (minus)

Capital - beg Net Income (minus)
Capital - end Net Income (add)
Cash Dividends declared Net Income (add)
Decrease in Asset Net Income (minus)
Decrease in bank loan Net Income (add)
Decrease in Interest Payable Net Income (add)
Decrease in Liability Net Income (add)
Increase in Asset Net Income (add)
Increase in bank loan Net Income (minus)
Increase in Interest Payable Net Income (minus)
Increase in Liability Net Income (minus)
Increase in Retained Earnings Net Income (minus)
Overdepreciation Net Income (add)
Overstatement of Ending Inventory Net Income (minus)
Retained Earnings - beg Net Income (minus)
Retained Earnings - end Net Income (add)
SC issued exceeded dividends Net Income (minus)
Share Capital increase Net Income (minus)
Share Dividends declared Net Income (add)
Share Premium increase Net Income (minus)
Underdeprecation Net Income (minus)
Understatement of Ending Inventory Net Income (add)
Withdrawals Net Income (add)
 Chapter 16
R/E in subsequent Expense/COGS Income Net Icome Retained Earnings
Accrued Expense - over Plus Over Under Under
Accrued Expense - under Minus Under Over Over
Accrued Income - over Minus Over Over Over
Accrued Income - under Plus Under Under Under
Beginning Inventory - over Plus Over Under Under
Beginning Inventory - under Minus Under Over Over
Deferred Income - over Plus Under Under Under
Deferred Income - under Minus Over Over Over
Depreciation - over Plus Over Under Under
Depreciation - under Minus Under Over Over
Ending inventory - over Minus Under Over Over
Ending inventory - under Plus Over Under Under
Prepaid expense - over Minus Under Over Over
Prepaid expense - under Plus Over Under Under
Purchases - over Plus Over Under Under
Purchases - under Minus Under Over Over
Sales - over Minus Over Over Over
Sales - under Plus Under Under Under
 Chapter 20
Convertible Bonds Payable
As if Converted
Net Income Net Income
Basic EPS Basic EPS
Ordinary Shares Outstanding Ordinary S O + Converted Shares (averaged)

NI + Interest Exp (averaged) (net of tax) Net Income + Interest Exp(averaged) (net of tax)
Diluted EPS Diluted EPS
Ordinary S O + As if converted (averaged) Ordinary S O + Converted Shares

Covertible Preference Share

As if Converted
Net Income - Pref Share Div Net Income - Preference Share Div (if paid in full bef conv)
Basic EPS Basic EPS
Ordinary Shares Outstanding Ordinary SO + Converted Shares (averaged)

Net Income Net Income

Diluted EPS Diluted EPS
Ordinary SO + As if Converted (averaged) Ordinary SO + Converted

Share Options and Warrants

As if Converted
Net Income Net Income
Basic EPS Basic EPS
Ordinary Shares Outstanding Ordinary SO + Converted Shares (averaged)

Net Income Net Income page

Diluted EPS Diluted EPS
Ordinary SO + Incremental Shares (averaged) Ordinary SO + (incremental shares + converted) 625

Option Shares - (option shares x option price/ Market Price)

Incremental Shares