TOA FOR MTE

D. Environmental reports

A complete set of financial statements includes all, except

A. Statement of financial position

B. Statement of changes in equity

C. Notes to financial statements

D. Environmental reports

A. To provide information about the financial position, financial performance and changes in financial position useful to a wide range of users

What is the objective of financial statements?

A. To provide information about the financial position, financial performance and changes in financial position useful to a wide range of users

B. To prepare a statement of financial position and statement of comprehensive income C. To deliver reliable, comparable and understandable information

D. To prepare financial statements in accordance with all applicable standards

Management of the entity

The primary responsibility for the preparation of financial statements is reposed in

A. Management of the entity

B. Internal auditor

C. External auditor

D. Controller

D. Statement of retained earnings

The major financial statements include all, except

A. Statement of financial position

B. Income statement

C. Statement of cash flows

D. Statement of retained earnings

B. Statement of changes in financial position

The major financial statements include all, except

A. Statement of financial position

B. Statement of changes financial position

C. Statement of comprehensive income

D. Statement of changes in equity

D. The fact that similar entities in the geographical area in which the entity operates have done so

When an entity changed the reporting period longer or shorter than one year, an entity shall disclose all except

A. Period covered by the financial statements

B. The reason for using a longer or shorter period

C. Statements are not comparable

D. The fact that similar entities in the geographical area in which the entity operates have done so

C. Report of board of directors

Which is not a component of financial statements?

A. Statement of financial position

B. Statement of changes in equity

C. Report of board of directors

D. Notes to financial statements

B. Statement of changes in equity

Which is included in a complete set of financial statements?

A. Statement of changes in financial position

B. Statement of changes in equity

C. Report of board of directors

D. Notes to financial statements

C. Statement of changes in equity

Which is included within the financial statements?

A. A statement of retained earnings

B. A statement of compliance with local legislation

C. Statement of changes in equity

D. Value added statement for the last five years

B. Name of major shareholders of the entity

An entity shall clearly identify each financial statement and display all of the following except

A. Name of the reporting entity

B. Name of major shareholders of the entity

C. Whether the financial statements cover the individual entity or a group of entities

D. Date of the report

D. An entity whose financial statements comply with PFRS shall make an explicit and unreserved statement of such compliance in notes.

Which statement is incorrect concerning fair presentation of financial statements?

A. Fair presentation requires the faithful representation of the effects of transactions and other events.

B. Financial statements shall present fairly the financial position, financial performance and cash flows of an entity.

C. In virtually all circumstances, a fair presentation is achieved by compliance with applicable PFRS.

D. An entity whose financial statements comply with PFRS shall make an explicit and unreserved statement of such compliance in notes.

D. To rectify inappropriate accounting policies either by explanatory information, policies used, or by notes.

Which of the following cannot be considered fair presentation of financial statements?

A. To present information in a manner that provides relevant and faithfully represented financial information.

B. To provide additional disclosures when compliance with specific PFRS is insufficient to understand the financial position and financial performance.

C. To select and apply accounting policies in accordance with applicable PFRS.

D. To rectify inappropriate accounting policies either by explanatory information, policies used, or by notes.

D. When the Conceptual Framework for Financial Reporting prohibits such a departure.

An entity is permitted to depart from a particular standard if all conditions are satisfied except

A. In extremely rare circumstances.

B. When management concludes that compliance with the standard would be misleading.

C. Whence fair presentation of the standard is necessary.

D. When the Conceptual Framework for Financial Reporting prohibits such a departure.

D. Gain or loss from disposal of noncurrent assets is reported by deducting from the proceeds the carrying amount of the asset.

Technically offsetting in financial statements is accomplished when

A. The allowance for doubtful accounts is deducted from accounts receivable.

B. The accumulated depreciation is deducted from property, plant and equipment.

C. The total liabilities are deducted from total assets.

D. Gain or loss from disposal of noncurrent assets is reported by deducting from the proceeds the carrying amount of the asset.

B. General purpose financial statements are designed to show the value of the reporting entity.

Which statement is incorrect in relation to the limitations of financial statements?
A. General purpose financial statements do not and cannot provide all of the information that users need.
B. General purpose financial statements are designed to show the value of the reporting entity.
C. General purpose financial statements are intended to provide common information to users.
D. Financial statements are largely based on estimate and judgment rather than exact depiction.

C. Must be presented separately if material.

Items of dissimilar nature or function:

A. Must always be presented separately.

B. Can choose whether to present separately.

C. Must be presented separately if material.

D. Must be presented separately even if immaterial

C. The previous comparable period for all amounts and for all narrative and descriptive information relevant to an understanding of the financial statements.

An entity must disclose comparative information for:

A. The previous comparable period for all amounts.

B. The previous comparable period for all amounts and narrative and descriptive information.

C. The previous comparable period for all amounts and for all narrative and descriptive information relevant to an understanding of the financial statements.

D. The previous two comparable periods for all amounts.

C. Must reclassify comparative amounts unless it is impracticable to do so.

When the classification of items in the financial statements is changed, the entity:

A. Must not reclassify the comparative amounts.

B. Can choose whether to reclassify.

C. Must reclassify comparative amounts unless it is impracticable to do so.

D. Must reclassify the current year amounts only.

D. Each financial statement with equal prominence.

An entity shall present:

A. The statement of cash flows more prominently.

B. The statement of financial position more prominently.

C. The income statement more prominently.

D. Each financial statement with equal prominence.

A. Annually

Financial statements must be prepared at least:

A. Annually

B. Quarterly

C. Semiannually

D. Every two years

B. Corporate management

Which would likely prepare the most accurate financial forecast for an entity based on empirical evidence?

A. Investor using statistical models

B. Corporate management

C. Financial analysts

D. Independent certified public accountants

B. Information presented on the accrual accounting

What is the most useful information in predicting future cash flows?

A. Information about current cash flows

B. Information presented on the accrual accounting

C. Information obtained from the accounting policies used

D. Information regarding financial position

C. Predicting long-term financial performance

The accrual basis of accounting is most useful for

A. Determining the amount of cash flows from liability

B. Predicting short-term financial performance

C. Predicting long-term financial performance

D. Determining the amount of dividends to shareholders

B. It provides a better indication of ability to generate cash flows than cash basis

Accrual accounting is used because

A. Cash flows are considered less important

B. It provides a better indication of ability to generate cash flows than cash basis

C. It recognizes revenue when cash is received

D. It is one of the implicit assumptions

C. Are both timely and precise because estimate and judgment must be used

The financial statements prepared under GAAP

A. Do not articulate with one another

B. Reflect single measurement which historical cost

C. Are both timely and precise because estimate and judgment must be used

D. Contain a limited number of future projections

C. Twelve months

When there is much variability, the operating cycle is

A. The mean value

B. The median value

C. Twelve months

D. Three years

A. Is the time between the acquisition of materials to process, and their realization in cash

The operating cycle of an entity

A. Is the time between the acquisition of materials to process, and their realization in cash

B. Is the time of converting accounts receivable to cash

C. Is the period of conversion experienced by entities

D. Is the seasonal variation experienced by entities

D. The asset is held primarily for trading

An entity shall classify an asset as current under all, except

A. The entity expects to realize the asset or intends to sell or consume it in its normal operating cycle

B. The entity expects to realize the asset within twelve months after the reporting period

C. The asset is cash or a cash equivalent

D. The asset is held primarily for trading

D. The entity has the right to defer settlement for at least twelve months after the reporting period

An entity shall classify a liability as current under all, except

A. The entity expects to settle the liability within the entity’s operating cycle

B. The liability is due to be settled primarily for trading

C. The liability is due to be settled within twelve months after the reporting period

D. The entity has the right to defer settlement for at least twelve months after the reporting period

A. Noncurrent liabilities and equity after liabilities (basta a sagot)

In the Philippines, the common practice is current before noncurrent liabilities and equity after liabilities (mali choices nito)

A. Noncurrent liabilities and equity after liabilities

B. Noncurrent before current assets

C. Current before noncurrent assets

D. Noncurrent liabilities and equity after assets

A. Income statement

In analyzing financial statements, which financial statement would a potential investor primarily use to assess earnings and financial flexibility?

A. Income statement

B. Statement of financial position

C. Statement of retained earnings

D. Statement of cash flows

B. Neither assets nor liabilities

Conceptually, asset valuation accounts are

A. Assets

B. Neither assets nor liabilities

C. Liabilities

D. Shareholders' equity

D. Current assets less current liabilities

Working capital is

A. Assets which enable the entity to operate profitably

B. Capital which has been reinvested in the business

C. Retained earnings

D. Current assets less current liabilities

D. Total assets less total liabilities

The term net assets represents

A. Retained earnings

B. Current assets less current liabilities

C. Total assets less current liabilities

D. Total assets less total liabilities

D. Inventory back into cash or 12 months whichever is longer

The basis for classifying assets as current or noncurrent and liabilities as current or noncurrent is the period of time normally required to convert assets into cash or use them to pay liabilities.

A. Inventory back into cash or 12 months whichever is shorter

B. Receivables back into cash or 12 months whichever is longer

C. Tangible fixed assets back into cash or 12 months whichever is longer

D. Inventory back into cash or 12 months whichever is longer

A. Trade accounts receivable normally collectible in 18 months

Which should be classified as current asset?

A. Trade accounts receivable normally collectible in 18 months

B. Cash for the redemption of preference shares

C. Cash surrender value

D. A deposit on machinery ordered within six months

D. Investment in subsidiary

Which should not be considered as a current asset?

A. Installment accounts receivable due over 18 months in accordance with normal trade practice

B. Prepaid taxes

C. Financial asset held for trading

D. Investment in subsidiary

C. Goodwill arising in a business combination

Current assets should never include

A. Receivable not collectible within one year

B. Current tax assets

C. Goodwill arising in a business combination

D. Premium paid in a bond investment

D. Noncurrent investments

Equity investments held to finance construction of a plant should be classified as

A. Current assets

B. Property, plant, and equipment

C. Intangible assets

D. Noncurrent investments

B. Franchise

Which of the following is not a noncurrent investment?

A. Investment in associate

B. Franchise

C. Land held for speculation

D. A sinking fund

A. Current assets

Assets to be sold, consumed or realized as part of the normal operating cycle are

A. Current assets

B. Noncurrent assets

C. Classified as current or noncurrent in accordance with other criteria

D. Noncurrent investments

C. Current liabilities

Liabilities that an entity expects to settle within the normal operating cycle are classified as

A. Noncurrent liabilities

B. Current or noncurrent liabilities in accordance with other criteria

C. Current liabilities

D. Equity

B. Goodwill

What is an example of an item which is not an element of financial liabilities

A. Accrued interest payable

B. Goodwill

C. Current liabilities

D. Noncurrent liabilities

D. Current assets

Accrued rent receivable would normally appear in the statement of financial position under

A. Noncurrent assets

B. Current liabilities

C. Noncurrent liabilities

D. Current assets

A. Plant expansion fund

Which of the following is usually classified as a noncurrent asset?

A. Plant expansion fund

B. Prepaid rent

C. Supplies unused

D. Trading investment

D. Noncurrent asset

Cash restricted for the settlement of a liability due 18 months after the reporting period should be presented as

A. Current asset

B. Equity

C. Noncurrent liability

D. Noncurrent asset

A. Current liability

Employment benefits that are due for settlement in 15 months’ time should be presented as

A. Current liability

B. Noncurrent asset

C. Noncurrent liability

D. Current asset

C. Noncurrent liability

A loan that is due for repayment in six months’ time but the entity expects, and has the discretion, to defer repayment two years later should be presented as

A. Current liability

B. Noncurrent asset

C. Noncurrent liability

D. Current asset

D. None of the above

A financial liability due within twelve months after the reporting period shall be classified as a noncurrent

A. When it is refinanced on a long-term basis

B. When the refinanced on a long-term basis after the end of reporting period

C. When the refinanced on a long-term basis on or before the end of reporting period

D. None of the above

D. Noncurrent if the borrower has already complied with the covenants at the end of reporting period

When a long-term loan is subject to covenants that must be complied with at the end of the reporting period, the liability is classified as

A. Current under all circumstances

B. Noncurrent at the discretion of the borrower

C. Noncurrent if the borrower complied with the covenants at the end of reporting period

D. Noncurrent if the borrower has already complied with the covenants at the end of reporting period

B. To report a measure of overall entity performance

What is the purpose of reporting comprehensive income?

A. To report transactions with owners

B. To report a measure of overall entity performance

C. To replace net income with a better measure

D. To combine income from continuing operations with income from discontinued operations

C. In the statement of financial statement

Which of the following is not an acceptable option of reporting other comprehensive income?

A. In a separate statement of comprehensive income

B. In an aggregate statement of comprehensive income

C. In the statement of financial statement

D. In a statement of changes in equity

D. Be displayed in a statement that has the same prominence as other financial statements

When a complete set of financial statements is presented, comprehensive income and its components should

A. Appear as a part of discontinued operations

B. Be reported net of related income tax effect in total

C. Appear in a supplemental schedule in the notes

D. Be displayed in a statement that has the same prominence as other financial statements

B. To avoid double counting of items

Why is reclassification adjustment used when reporting other comprehensive income?

A. To reclassify an item of comprehensive income as another item of comprehensive income

B. To avoid double counting of items

C. To ensure equality of comprehensive income

D. To adjust the income tax effect of OCI

D. Dividends paid to shareholders

The components of OCI include all except

A. Unrealized gain on derivative contract designated as cash flow hedge

B. Unrealized loss from translating the financial statements of a foreign operation

C. Actuarial gain on a defined benefit plan

D. Dividends paid to shareholders

B. Unrealized gain on financial asset held for trading

Which is not a component of OCI?

A. Foreign currency translation adjustment

B. Unrealized gain on financial asset held for trading

C. Unrealized loss on derivative designated as cash flow hedge

D. Change in revaluation surplus

B. Treasury shares at cost

Which is not a component of OCI?

A. Remeasurement of defined benefit plan

B. Treasury shares at cost

C. Foreign currency translation adjustment

D. Unrealized gain on equity investment at FVOCI

D. A continuation from net income in the income statement or a separate statement that begins with net income

Which of the following options for displaying other comprehensive income is preferred?

A. A continuation from net income in the income statement

B. A separate statement that begins with net income

C. In statement of changes in equity

D. A continuation from net income in the income statement or a separate statement that begins with net income

A. Component of income from continuing operations

How should exchange gain or loss resulting from foreign currency transaction be accounted for?

A. Component of income from continuing operations

B. Component of other comprehensive income

C. Line item within income from continuing operations

D. Included in net income for gain but deferred for loss

C. Line item within income from continuing operations

Unusual and infrequent gain and loss should be reported

A. Below income from continuing operations

B. As an extraordinary item

C. Line item within income from continuing operations

D. Component of other comprehensive income

B. Includes all changes in equity except those resulting from investments by and distributions to owners.

The term comprehensive income

A. Must be reported on the face of the income statement.

B. Includes all changes in equity except those resulting from investments by and distributions to owners.

C. Is the net change in owners' equity for the period.

D. Is synonymous with the term net income.

D. Gain on remeasuring equity investment at FVOCI

All of the following components of other comprehensive income are reclassified to profit or loss, except

A. Gain from translation of a foreign operation

B. Loss from remeasuring debt investment at FVOCI

C. Gain on hedging instrument in a cash flow hedge

D. Gain on remeasuring equity investment at FVOCI

D. All of these components of OCI should be reclassified to retained earnings

Which component of other comprehensive income should be reclassified to retained earnings?

A. Revaluation surplus

B. Remeasurement of defined benefit plan

C. Change in fair value attributable to credit risk of financial liability designated at FVPL

D. All of these components of OCI should be reclassified to retained earnings

C. Exclude certain gains and losses included in comprehensive income

Earnings

A. Include certain gains excluded from comprehensive income

B. Are the same as comprehensive income

C. Exclude certain gains and losses included in comprehensive income

D. Include certain gains and losses excluded from comprehensive income

D. A separate income statement and a separate statement of comprehensive income

The two-statement approach of presenting comprehensive income is preparing

A. A comparative statement of comprehensive income

B. A combined statement of comprehensive income and retained earnings

C. A combined income statement and a statement of changes in equity

D. A separate income statement and a separate statement of comprehensive income

C. Either the nature of expenses or the function of expenses, whichever provides information that is reliable and more relevant.

An analysis of expenses is based on

A. The nature of expenses.

B. The function of expenses.

C. Either the nature of expenses or the function of expenses, whichever provides information that is reliable and more relevant.

D. Either the nature of expenses or the function of expenses, whichever the entity would prefer to present.

C. Depreciation, purchases, transport costs, employee benefits and advertising costs.

Line items in an analysis of expenses by nature include

A. Purchases, transport costs, employee benefits, depreciation, extraordinary items.

B. Distribution costs and administrative costs.

C. Depreciation, purchases, transport costs, employee benefits and advertising costs.

D. Cost of goods sold, administrative and distribution costs.

D. Cost of goods sold, administrative and distribution costs.

Line items in an analysis of expenses by function include

A. Purchases, transport costs, employee benefits, depreciation, extraordinary items.

B. Purchases, distribution costs, administrative costs.

C. Depreciation, purchases, transport costs, employee benefits and advertising costs.

D. Cost of goods sold, administrative and distribution costs.

B. Has been eliminated.

Under IFRS, the extraordinary item presentation

A. Has not changed from current rules.

B. Has been eliminated.

C. Has been eliminated from the net of tax presentation.

D. Has been eliminated from EPS reporting.

D. Reclassification adjustments

Amounts reclassified to profit or loss or retained earnings in the current period but were recognized in OCI in the current or previous periods are known as

A. Correcting entries

B. Prior period adjustments

C. Unusual and irregular items

D. Reclassification adjustments

D. Net earnings for a period of time.

The income statement reveals

A. Resources and equity at a point in time.

B. Resources and equity for a period of time.

C. Net earnings at a point in time.

D. Net earnings for a period of time.

B. Change of wealth

Conceptually, net income is a measure of

A. Wealth

B. Change of wealth

C. Capital maintenance

D. Cash flow

D. Extraordinary

Which term cannot be used to describe a line item in the statement of comprehensive income?

A. Revenue

B. Gross income

C. Income before tax

D. Extraordinary

C. Using a transaction approach

Income determination is arrived at by

A. Measuring the change in owners' equity

B. Identifying the change in the purchasing power

C. Using a transaction approach

D. Applying the value added concept

C. Revenue minus expenses

Net income equals

A. Assets minus liabilities

B. Revenue minus cost of goods sold

C. Revenue minus expenses

D. Cash receipts minus cash payments

B. Only actual amounts are reported in net income.

The limitations of the income statement include all of the following, except

A. Items that cannot be measured reliably are not reported.

B. Only actual amounts are reported in net income.

C. Income measurement involves judgment.

D. Income numbers are affected by the accounting method.

D. Use by investors interested in financial position

Which of the following would represent the least likely use of an income statement?

A. Use by customers to determine an entity's ability to provide needed goods and services

B. Use by labor unions to examine earnings closely as a basis for salary discussions

C. Use by government to formulate tax policy

D. Use by investors interested in financial position

C. Estimate amount, timing and uncertainty of future cash flows

The income statement would help in which of the following?

A. Evaluate liquidity

B. Evaluate solvency

C. Estimate amount, timing and uncertainty of future cash flows

D. Estimate future financial flexibility

A. To evaluate the future performance of an entity.

Investors and creditors use income statement information for each of the following, except

A. To evaluate the future performance of an entity.

B. To provide a basis for predicting future performance.

C. To help assess the risk and uncertainty of achieving future cash flows.

D. To evaluate the past performance of an entity.

C. Estimate future cash flows

The income statement would help in which of the following?

A. Assess capital structure

B. Determine financial position

C. Estimate future cash flows

D. Estimate need for additional financing

A. The carrying amount of the asset or disposal group is recovered through a sale transaction.

An entity shall classify a noncurrent asset or disposal group as held for sale when

A. The carrying amount of the asset or disposal group is recovered through a sale transaction.

B. The carrying amount of the asset or disposal group is recovered through continuing use.

C. The noncurrent asset or disposal group is abandoned.

D. The noncurrent asset or disposal group is idle or retired from active use.

C. Lower between carrying amount and fair value less cost of disposal.

An entity shall measure a noncurrent asset or disposal group classified as held for sale at

A. Carrying amount

B. Fair value less cost of disposal

C. Lower between carrying amount and fair value less cost of disposal.

D. Higher between carrying amount and fair value less cost of disposal.

A. Current asset

Noncurrent asset held for sale is presented as

A. Current asset

B. Other noncurrent asset

C. Noncurrent investment

D. Property, plant and equipment

B. Accounted for as an impairment loss.

If the fair value less cost of disposal is lower than the carrying amount of a noncurrent asset classified as held for sale, the difference is

A. Not accounted for

B. Accounted for as an impairment loss.

C. Charged to depreciation

D. Debited to retained earnings

A. The carrying amount is recovered principally through continuing use.

A noncurrent asset that is to be abandoned shall not be classified as held for sale because
A. The carrying amount is recovered principally through continuing use.
B. It is difficult to value.
C. It is unlikely that the noncurrent asset is sold within twelve months.
D. It is unlikely that there is an active market for the noncurrent asset.

D. The probability is higher than more likely than not.

In order for a noncurrent asset to be classified as held for sale, the sale must be highly probable. What is the meaning of highly probable?

A. The future sale is likely to occur.

B. The future sale is more likely than not to occur.

C. The sale is certain.

D. The probability is higher than more likely than not.

B. The assets of the disposal group shall be reported separately under current assets and the liabilities of the disposal group shall be reported separately under current liabilities.

How should the assets and liabilities of a disposal group classified as held for sale be reported in the statement of financial position?

A. The assets and liabilities shall be offset and presented as a single amount.

B. The assets of the disposal group shall be reported separately under current assets and the liabilities of the disposal group shall be reported separately under current liabilities.

C. The assets and liabilities shall be presented as a single amount and as a deduction from equity.

D. There should be no separate disclosure of assets and liabilities that form part of a disposal group.

B. At the lower of cost and fair value less cost of disposal

An entity acquired a subsidiary exclusively with a view to selling it. The subsidiary met the criteria to be classified as held for sale. At the end of reporting period, the subsidiary has not yet been sold and six months have passed since the acquisition. How will the subsidiary be measured in the statement of financial position at the date of the first financial statements after acquisition?

A. At fair value

B. At the lower of cost and fair value less cost of disposal

C. At carrying amount

D. In accordance with applicable IFRS

C. The gain shall be recognized but not in excess of the cumulative impairment loss previously recognized.

What is the treatment of any gain on a subsequent increase in the fair value less cost of disposal of a noncurrent asset classified as held for sale?

A. The gain shall be recognized in full.

B. The gain shall not be recognized.

C. The gain shall be recognized but not in excess of the cumulative impairment loss previously recognized.

D. The gain shall be recognized but only in retained earnings.

C. The lower between carrying amount on the basis that the asset had never been classified as held for sale and recoverable amount

An entity classified a noncurrent asset accounted for under the cost model as held for sale at the current year-end. Because no offers were received at an acceptable price, the entity decided at the end of next year not to sell the asset but to continue to use it. The asset shall be measured at the end of next year at what amount?

A. The lower of carrying amount and recoverable amount

B. The higher of carrying amount and recoverable amount

C. The lower between carrying amount on the basis that the asset had never been classified as held for sale and recoverable amount

D. The higher between carrying amount on the basis that the asset had never been classified as held for sale and recoverable amount

D. In the period of change and future periods if the change affects both

How should the effect of a change in accounting estimate be accounted for?

A. By restating amounts reported in prior periods

B. By reporting proforma amounts for prior periods

C. As a prior period adjustment of retained earnings

D. In the period of change and future periods if the change affects both

B. It does not effect the financial statements of prior period

Which is characteristic of a change in accounting estimate?

A. It usually need not be disclosed

B. It does not effect the financial statements of prior period

C. It should be reported through the restatement of the financial statements

D. It makes necessary the reporting of proforma amounts

A. An accounting change reported in the period of change and future periods if the change affects both

A change in the periods benefited by a deferred cost because additional information has been obtained is

A. An accounting change 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

A. An accounting change reported in the period of change and future periods if the change affects both

A change in the residual value of an asset arising because additional information has been obtained is

A. An accounting change 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

A. A change in accounting estimate is a normal recurring correction or adjustment.

Why is retrospective treatment of change in accounting estimate prohibited?

A. A change in accounting estimate is a normal recurring correction or adjustment.

B. The retrospective treatment is not allowed.

C. Retrospective treatment of a change in accounting estimate is required by IFRS.

D. IFRS is silent on the issue

C. As an accounting estimate

The change in accounting policy inseparable from a change in accounting estimate should be reported

A. By restating the financial statements of all prior periods.

B. As a correction of an error.

C. As an accounting estimate

D. As a disclosure after income from continuing operations.

D. An accounting change that should be reported currently and prospectively

Which should be reported when an entity changed from straight line depreciation to double declining method?

A. Cumulative effect of change in accounting policy

B. Proforma effect of retroactive application

C. Prior period error

D. An accounting change that should be reported currently and prospectively

C. To conform with the depreciation method prevalent in a particular industry

Which is not a justification for a change in depreciation method?

A. A change in the estimated useful life

B. A change in the pattern of the estimated future benefit

C. To conform with the depreciation method prevalent in a particular industry

D. A change in the estimated future benefit

D. An accounting change that should be reported in the period of change and future periods

Which of the following should be reported when an entity changed the expected service life of an asset?

A. Cumulative effect of change in accounting policy

B. Proforma effect of retroactive application

C. Prior period error

D. An accounting change that should be reported in the period of change and future periods

C. Recompilation of depreciation for current and future years

Which is required for a change in the useful life and residual value of an asset?

A. Reported in the statement of retained earnings

B. Retrospective restatement

C. Recompilation of depreciation for current and future years

D. Not reported