Professional Documents
Culture Documents
A
D
B
B
D
6. A
7. A
8. D
9. C
10. D
1. These are the specific principles, bases, conventions, rules and practices
applied in the preparation and presentation of financial statements
e. Accounting policies
f. Accounting principles
g. Accounting standards
h. Accounting concepts
2. A change in accounting policy includes
I.
Adoption of an accounting policy for events or transactions that differ
in substance from previously occuring events or transactions
II.
The adoption of a new accounting poicy for events or transactions
which did not occur previously or that were immaterial
a. I only
b. II only
c. Both I and II
d. Neither I nor II
3. A change in accounting policy includes all of the following except
a. The initial adoption of a policy to carry assets at revalued amount
b. The change from cost model to revaluation model in measuring
property, plant and equipment
c. The change in inventory valuation from FIFO to weighted average
method
d. The change in depreciation method from sum or years digits to straight
line
4. A change in accounting policy shall be made when
I.
Required by an accounting standard or an interpretation of the
standard
II.
The change will result in more relevant or reliable information about
the financial position, financial performance and cash flows of the
entity
a. I only
b. II only
c. Either I or II
d. Neither I nor II
5. In the absence of an accounting standard that applies specifically to a
transaction, what is the most authoritatitve source in developing and
applying an accounting policy?
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 oehter standard-setting body
d. Accounting literature and accepted industry practice
6. The initial application of a policy to revalue assets is
a. A change in accounting policy
b. A change in accounting estimate
c. Correction of a prior period error
d. Not an accounting change
6. A
2. D
7. C
3. D
8. A
4. C
9. B
5. A
10. B
2.
3.
4.
5.
6.
7.
II. Investment properties are now measured at fair value, having previously
been measured at cost
a. I only
b. II only
c. Both I and II
d. Neither I nor II
8. Which of the following should be treated as a change in accounting policy?
I. A new accounting policy of capitalizing development costs as a project has
become eligible for capitalization for the first time
II. A new policy resulting from the requirements of a new PFRS
III. To provide more relevant information. Items of property, plant and
equipment are now being measured at fair value, whereas they had
previously been measured at cost
IV. An entity engaging in construction contracts for the first time needs an
accounting policy to deal with this
a. I, II, III and IV
b. I and II only
c. II and III only
d. I and IV only
9. The draft financial statements of an entity for the current year have been
prepared. A final review of the draft revealed that closing inventory at the
end of the prior year included items which had been sold in the later part of
the prior year.
What is the effect of the adjustment to be made to the profit for the current
year and to the profit for the prior year presented as the comparative figure
in the financial statements of the current year?
Profit for current year
a.
Increase
b.
Increase
c.
Decrease
d.
Decrease
I. it is required by law
II. The change wil result in providing reliable and more relevant information
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Answers:
1. B
6. A
2. C
7. B
3. C
8. C
4. B
9. A
5. C
10. B
b. II only
c. Both I and II
d. Neither I nor II
7. The effect of a change in accounting policy that is inseparable from the effect
of a change in acounting estimate shall be reported
a. By restating the financial statements of all prior periods presented
b. As a correction of an error
c. As a component of income from continuing operations, in the period of
change and future periods if the change affects both
d. As a separate disclosure after income from continuing operations,in the
period of change and future periods if the change affects both
8. When an entity changed from straight line method of depreciation for
previously recorded assets to the double declining balance method, which of
the following should be reported?
a. Cumuative effect of change in accounting policy
b. Proforma effect of retroactive application
c. Prior period error
d. An accounting
prospectively
change
that
should
be
reported
currently
and
6. D
2. B
7. C
3. B
8. D
4. A
9. D
5. A.
10. D
1. Accounting changes are often made and the monetary impact is reflected in
the financial statements of an entity even though, in theory, this may be a
violation of accounting concept of
a. Materiality
b. Consistency
c. Prudence
d. Objectivity
2. Which of the following is not classified as an accounting change?
a. Change in accounting policy
b. Change in accounting estimate
c. Error in the financial statements
d. All of these are classified as an accounting change
3. Which of the following is the best explanation why accounting changes are
classified into change in accounting policy and change in accounting
estimate?
a. The materiality of the change involved
b. Each change involves different method of reconition in the financial
statements
c. The fact that some treatments are considered GAAP and some are not
in
accounting
estimate
is
6. B
2. C
7. C
3. B
8. A
4. A
9. B
5. A
10. D