ADMS 3585 Lecture Notes - Lecture 2: Financial Statement, Audit, Historical Cost
20 Jun 2014
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Adms 3585 summer 2014 solutions to class review questions. This is a change in how sheridan does business. The revenue recognition principle requires that the risks and rewards of ownership be transferred to the purchaser in order for the sale to be recognized. While the shipping terms have been changed, further investigation should be undertaken to ensure that customer business practices are aligned with this changed policy. Depreciation is a means of cost allocation on a systematic charge against revenues. As it is based on best estimates, the useful life, and resulting depreciation expense, should be revised when economic or business events dictate that an asset will remain useful for a longer period. While comparability is impaired, changes in estimates are accounted for prospectively. Restatement would not provide decision useful information, since depreciation of the prior periods was determined with the best estimates available at the time.
