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Multiple Choice Questions Accounting Policies

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155 views

Multiple Choice Questions Accounting Policies

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Uy Uy Choice
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Your Results for "Chapter 4: Accounting policies, accounting Print this page

estimates and errors"


Site Title: International Financial Reporting: A Practical Guide
Book's Title: International Financial Reporting: A Practical Guide, 5th Edition
Book's Author: Melville
Location on Site: Multiple choice questions > Chapter 4: Accounting policies, accounting estimates and
errors
Date/Time Submitted: August 19, 2021 at 1:06 PM (UTC/GMT)

Overall Score: 58% of 12 questions

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1. The term "accounting policies" refers to:

Your Answer: All of the above

2. If an accounting standard applies specifically to a certain item, an entity's accounting policy in relation to
that item must normally be determined by applying the relevant standard. True or False?

Your Answer: True

3. An entity may change one of its accounting policies:

Your Answer: If this would result in the provision of reliable and more relevant information

4. A change in accounting policy which does not result from the initial application of an international
standard must normally be accounted for:

Your Answer: Retrospectively

5. For all changes in accounting policy, the entity concerned must disclose:

Your Answer: The fact that the change has been accounted for in accordance with transitional
provisions specified in the applicable standard
Correct Answer: The nature of the change
6. A change in an accounting estimate should be accounted for:

Your Answer: Retrospectively unless it is impracticable to do so


Correct Answer: Prospectively

7. The use of estimates always undermines the reliability of financial statements. True or False?

Your Answer: False

8. Prior period errors could be caused by:

Your Answer: Mathematical errors


Correct Answer: Any of the above

9. A material prior period error should be corrected:

Your Answer: Prospectively


Correct Answer: Retrospectively

10. An entity's financial statements provide comparative figures for the previous five accounting periods. If
the entity accounts for an item retrospectively, then:

Your Answer: Comparative figures for the previous five accounting periods are not restated in any
circumstances
Correct Answer: Comparative figures for all of the previous five accounting periods may need to be
restated

11. Which of the following is a change of accounting policy?

Your Answer: Changing from the cost model to the revaluation model when measuring items of
property, plant and equipment

12. When preparing its financial statements for 2016, a company discovers an error in the 2015 financial
statements. The 2015 revenue figure should have been £102m but was erroneously reported as £100m.
This difference is regarded as material.
The comparative figure for revenue shown in the 2016 financial
statements should be:

Your Answer: £102m

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