describe the fi nancial reporting treatment and analysis of non-recurring items (including discontinued operations, extraordinary items, unusual or infrequent items) and changes in accounting standards

describe the fi nancial reporting treatment and analysis of non-recurring items (including discontinued operations, extraordinary items, unusual or infrequent items) and changes in accounting standards

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 18MC: Corrections of errors that occurred on a previous periods financial statements are called ________....

See similar textbooks

Related questions

Q: How is the accounting treatment of an event that occurred on the date before the report was…

A: Subsequent events are events occurring after balance sheet but before the issue of financial…

Q: The Framework issued by the IASB suggests that to show a true and fair view the information in…

A: International Accounting standard Boards (IASB) The purpose of forming the International Accounting…

Q: If a company registered with the SEC justifies a change in accounting method as preferable under the…

A: Securities Exchange Commission (SEC): This is the government agency governs the working of financial…

Q: A change in accounting estimate is accounted for by Prospective application Retrospective…

A: A change in accounting estimate refers to an adjustment made to an asset or liability on the books…

Q: Choose the correct. How should material seasonal variations in revenue be reflected in interim…

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost.…

Q: Which of the following should be treated as a change in accounting policy? A. A change is made in…

A: The accounting policies are referred to as the bases, ideas, and concepts that an entity uses to…

Q: Which of the following is not a characteristic of non-counterbalancing error? Group of answer…

A: Non counter balancing errors are those errors which will not be automatically corrected in the next…

Q: Prospective application of recognizing the effect of a change in an accounting estimate means A.…

A: Prospective means expected or expecting thing in the future. Financial statements are the reports of…

Q: hen there is a lack of consistent application of GAAP due to a new accounting pronouncement, no…

A: Audit need to give opinion of true and fair view of financial statement but if auditor need to draw…

Q: Changes in accounting policy are Permitted if the change will result in a more reliable and more…

A: Change in accounting policy refers to change in the method of accounting principles or rules…

Q: When it is difficult to distinguish between a change of estimate and a change in accounting policy,…

A: Answer : (a) Treat the entire change as a change in estimate with appropriate disclosure.

Q: IAS 37, Provisions, Contingent Liabilities and Contingent Assets was issued in 1998. The Standard…

A: The objective of IAS 37 is to ensure proper recognition and disclosure of provisions, contingent…

Q: The accounting and auditing literature discusses several different types of accounting changes. For…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Why should the beginning retained earnings be adjusted for prior period errors and effects of change…

A: Prior period errors are the omissions from and miss-statements in entity's financial statement for…

Q: Vhich of the following statements is incorrect regarding statement of financial osition errors? DIt…

A: Solution Concept Real account Real account is a permanent account that is not closed…

Q: Discuss and illustrate how a correction of an error in previously issued financial statements should…

Q: Under IFRS, changes in accounting policies are a. permitted if the change will result in a more…

Q: Using IFRS, a change in accounting policy for which a standard does not include specific…

A: IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring…

Q: When auditors wish to issue an unmodified opinion but highlight that the entity changedits method of…

Q: examples of changes that affect consistency and

A: According to the consistency principle of accounting, an accounting policy or method should be…

Q: The use of the cumulative effect method to account for a change in accounting principle violates the…

A: Accounting principles are the set of rules which define the way accounts should be prepared and…

Q: Why is retrospective treatment of changes in accounting estimated prohibited? A. Changes in…

A: IFRS:- The full form of IFRS is International Financial Reporting Standards. IFRS is issued by…

Q: Discuss the following terms used in MFRS 108 Accounting Policies, Changes in Accounting Estimates…

A: MFRS stands for Malaysian Financial Reporting Standards that are based on International…

Q: Corrections of significant errors of past periods are charged or credited directly to the Retained…

A: Retained earnings comes under the head liabilities in the balance sheet .

Q: Which of the following is most likely to be a non-adjusting event? * A major customer liquidates its…

A: Non-Adjusting Event: When an event occurs that is not an adjustment to the financial statements, it…

Q: Prior period errors are omissions from and misstatements in the financial statements for one or more…

A: Prior period items means those items which arises in current year due to error and omission in the…

Q: If an entity does not prepare interim financial reports A. The year-end financial statements are…

A: Interim financial reports - It means formulation and presenting of financial facts or events for a…

Q: Which of the following would be considered a change that affects consistency? * Change in accounting…

A: Consistency principles says that method and principles applying in preparing the financial statement…

Q: The following does not constitute fair presentation and compliance with IFRS: a) an entity rectify…

A: IFRS refers to International Financial Reporting Standards. It is a set of rules or guidelines which…

Q: Which of the following is not a characteristic of non-counterbalancing error? a. If not detected,…

A: The errors which are not automatically corrected in the following accounting period is known as…

Q: According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must…

A: Accounting policies are the measures, principles or rules which are applied by the entities so that…

Q: The accounting and auditing literature discusses several different types of accounting changes. For…

A: Given the following circumstances under which the auditor needs to add a paragraph to the audit…

Q: Which of the following is not one of the suggested approaches to reporting changes in the accounts?…

A: Reporting changes: These implies to the changes that are required to make to the accounts when there…

Q: Which report would not be appropriate for a public accounting firm to provide on financial reporting…

Q: When it is difficult to distinguish between a change in accounting estimate and a change in…

A: Accounting Policy:-It is specific principles, rules, practices which get applied in the financial…

Q: The mandatory adoption of a new accounting principle as a result of a new FASB Statement requires…

A: FASB stands financial accounting standards board. It basically aims at improving GAAP (Generally…

Q: If the statement of financial position error is discovered in a subsequent accounting period, what…

A: The error in the financial statement could be cause due to any mathematical mistakes or other…

Q: Which of the following is not classified as an accounting change by IFRS?(a) Change in accounting…

A: International Financial Reporting Standard (IFRS): An international standard for identifying,…

Q: ow they are reported. What are the disclosure requirements for correction of errors. Please see…

A: Accounting Errors : A non-fraudulent inconsistency in financial documents is referred to as an…

Q: Discuss how a change in accounting policy is handled when it is impractical to ascertain earlier…

A: This question explains about impractical to ascertain earlier values due to unforeseen…

Q: According to IAS 8, how should prior period errors that are discovered in a subsequent reporting…

Q: Explain the reporting of accounting changes and errors.

A: Accounting changes: Accounting changes are the alterations made to the accounting methods,…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through c.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. non-public company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error c. Change from non-GAAP to GAAP (a special case of correction of an error)
Corrections of errors that occurred on a previous periods financial statements are called ________. A. restrictions B. deficits C. prior period adjustments D. restatements
According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must select and apply its accounting policies consistently from one period to the next and among various items in the financial statements. However, an entity may change its accounting policies under certain conditions. Required: Identify the circumstances under which it may be appropriate to change accounting policy in accordance with the guidance given in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
Directions: Please select the appropriate answer on the statement below;B - If the statement is trueS - When the statement is false or part of the statement is false The objective of the first reporting standard is to ensure that comparisons of financial statements between periods do not have a material impact on changes in accounting standards or provide adequate disclosures if those changes have a material impact on the comparison of financial statements between periods.
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
Which case below is not one of the examples of changes that affect consistency and require an explanatory paragraph, if material A. Changes in reporting entities B. Corrections of accounting principle errors C. Changes in accounting principles D. Scope limitations
If the statement of financial position error is discovered in a subsequent accounting period, what action is to be done by the entity? A. Reclassify the item to its proper real account but do not restate the statement of financial position of the prior year affected by the error. B. Reclassify the item to its proper real account. C. Restate the statement of financial position of the prior year affected by the error. D. Reclassify the item to its proper real account and restate the statement of financial position of the prior year affected by the error
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
According to IAS 8, how should prior period errors that are discovered in a subsequent reporting period be recognized in the financial statements? a. As an adjustment to beginning retained earnings for the reporting period in which the error was discovered. b. As a note in the financial statements that the error was previously made but has since been corrected. c. In the statement of comprehensive income. d. Retroactively for all periods presented.
When it is difficult to distinguish between a change of estimate and a change in accounting policy, then an entity should (a) Treat the entire change as a change in estimate with appropriate disclosure. (b) Apportion, on a reasonable basis, the relative amounts of change in estimate and the change in accounting policy and treat each one accordingly. (c) Treat the entire change as a change in accounting policy. (d) Since this change is a mixture of two types of changes, it is best if it is ignored in the year of the change; the entity should then wait for the following year to see how the change develops and then treat it accordingly.
The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through e.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. nonpublic company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error e. Change from non-GAAP to GAAP (a special case of correction of an error)
The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through e.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. nonpublic company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error e. Change from non-GAAP to GAAP (a special case of correction of an error) PLEASE ANWSER ONLY SECTION D & E THANK YOU!