Which of the following should be reported as a prior period adjustment? Change in Accounting Principle = Yes; Error Correction = No Change in Accounting Principle = No; Change in Accounting Principle = Yes; Change in Accounting Principle = No; Error Correction = Yes Error Correction = Yes Error Correction = No

Which of the following should be reported as a prior period adjustment? Change in Accounting Principle = Yes; Error Correction = No Change in Accounting Principle = No; Change in Accounting Principle = Yes; Change in Accounting Principle = No; Error Correction = Yes Error Correction = Yes Error Correction = No

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 17Q: Sometimes financial statements contain errors. What type of liabilities may need correction as a...

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What are erros that are automatically corrected in the next accounting period, even if they're not discovered. A. Non-counterbalancing errors, B. Prior period adjustments, C. Changes in accounting principle, or D. Counterbalancing erros.
Prior-period adjustments can arise from a change in accounting principle. a change in accounting entity. a correction of an error made in a prior period. all of these choices.
Which of the following is not a characteristic of non-counterbalancing error? a. If not detected, this is not automatically corrected in the next accounting period. b. The income statement of the period in which the non-counterbalancing error is committed is misstated. c. The statement of financial position of the year of non-counterbalancing error and succeeding statement of financial position are incorrect until the error is corrected. d. If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected.
Why is retrospective treatment of changes in accounting estimatedprohibited? A. Changes in estimate are normally corrections and adjustments which are the natural result of the accounting process B. The retrospective treatment for any type of presentation is not allowed C. Retrospective treatment of changes in accounting estimate is required by IFRS D. The IFRS is silent on the issue
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Which of the following is not a characteristic of non-counterbalancing error? Group of answer choices a.If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected. b.The statement of financial position of the year of non-counterbalancing error and succeeding statement of financial position are incorrect until the error is corrected. c.If not detected, this is not automatically corrected in the next accounting period. d.The income statement of the period in which the non-counterbalancing error is committed is misstated.
Sometimes financial statements contain errors. What type of liabilities may need correction as a prior period adjustment?
When it is difficult to distinguish a change in accounting policy from achange in an accounting estimate, the change is treated as A. Change in accounting estimate with appropriate disclosureB. Change in accounting policyC. Correction of an errorD. Initial adoption of an accounting policy
How is a correction of an accounting error made?
Retrospective restatement usually is appropriate for a change in: Accounting Estimate Accounting Principle a. Yes Yes b. Yes No c. No Yes d. No No Multiple Choice Option c Option b
Which of the following is true regarding whether IFRS specifically addresses the accounting and reporting for effects of changes in accounting policies? Direct Effects Indirect Effects a. Yes Yes b. No No c. No Yes d. Yes No
Which of the following is not one of the approaches for reporting accounting changes? The change approach. O The retrospective approach. The prospective approach. O All of these answer choices are approaches for reporting accounting changes.