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Ias 8 Test Bank PDF
Ias 8 Test Bank PDF
a. An accounting change that should be reported in the period of change and future
periods if the change affects both
b. An accounting change that should be reported by restating the financial statements
of all prior periods presented
c. A correction of an error
d. Not an accounting change
4. A change in the residual value of an asset arising because additional information has
been obtained is
a. An accounting change that should be reported in the period of change and future
periods if the change affects both
b. An accounting change that should be reported by restating the financial statements of
all prior periods presented
c. A correction of an error
d. Not an accounting change
5. The effect of a change in accounting policy that is inseparable from the effect of a
change in accounting estimate should be reported
6. When an entity changed from the straight line method of depreciation to the double
declining balance method, which of the following should be reported?
8. When an entity changed the expected service life of an asset, which of the following
should be reported?
9. Accounting changes are often made even though this may be a violation of the
accounting concept of
a. Materiality
b. Consistency
c. Prudence
d. Objectivity
10. Which is not classified as an accounting change?
11. Which is the best explanation why accounting changes are classified into change in
accounting policy and change in accounting estimate?
13. Which is the first step within the hierarchy of guidance when selecting accounting
policies?
a. The requirement and guidance in the standard or interpretation dealing with similar
and related issue.
b. The definition, recognition criteria and measurement of asset, liability, income and
expense in the Conceptual Framework
c. Most recent pronouncement of other standard-setting body.
d. Accounting literature and accepted industry practice.
15. A change in accounting policy shall be made when
I. Required by law.
II. Required by an accounting standard or an interpretation of the standard.
III. The change will result in more relevant or reliable information about the financial
position, financial performance and cash flows of the entity.
a. The change would allow the entity to present a more favorable profit picture.
b. The change would result in the financial statements providing more reliable and
relevant information about financial position, financial performance and cash flows.
c. The change is made by the internal auditor.
d. The change is made by the CPA.
17. A change in accounting policy requires what kind of adjustment to the financial
statements?
18. A change in accounting policy requires that the cumulative effect of the change for
prior periods should be reported as an adjustment to
a. A change is made in the method of calculating the provision for uncollectible accounts
receivable.
b. A change from cost model to fair value model in measuring investment property.
c. An entity engaging in construction contract for the first time needs on accounting
policy to deal with this.
d. All of these qualify as change in accounting policy.
a. Recognizing a change in accounting policy in the current and future periods affected
by the change.
b. Correcting the financial statements as if a prior period error had never occurred.
c. Applying a new accounting policy to transactions occurring after the date at which the
policy is changed.
d. Applying a new accounting policy to transactions as if that policy had always been
applied.
25. Which term best describes applying a new accounting policy to transactions as if that
policy had always been applied?
a. Retrospective application
b. Retrospective restatement
c. Prospective application
d. Prospective restatement
26. This means correcting the recognition, measurement and disclosure of amounts of
elements of financial statements as if a prior period error had never occurred.
a. Retrospective application
b. Retrospective restatement
c. Prospective application
d. Prospective restatement
27. All of the following should be treated as a change in accounting policy, except
31. When financial statements for a single year are being presented, a prior period error
should
34. An entity that changed from cash basis to accrual basis of accounting during the
current year should report
36. During the current year, an entity discovered that ending inventory reported in the
financial statements for the account for this understatement?
37. On March 25, 2018, the entity discovered that depreciation expense for 2017 was
overstated. The 2017 financial statements were authorized for issue on April 1, 2018. What
must the entity do?
38. On March 25, 2018, the entity discovered that depreciation expense for 2017 was
overstated. The 2017 financial statements were authorized for issue on March 1, 2018.
What must the entity do?
a. Reissue the 2017 financial statements with the correct depreciation expense.
b. Reduce depreciation for 2018.
c. Restate the depreciation expense reported for 2017 in the comparative figures of the
2018 financial statements.
d. Do nothing
a. Accounting policy
b. Accounting estimate
c. Accounting method
d. Accounting concept
40. Which of the following does not represent a change in reporting entity?
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