Under IFRS, share dividends declared after the statement of financial position date but before the end of the subsequent events period are:(a) accounted for similar to errors as a prior period adjustment.(b) adjusted subsequent events, because they are paid from prior year earnings.(c) not adjusted in the current year’s financial statements.(d) recognized on a prospective basis from the date of declaration.

Under IFRS, share dividends declared after the statement of financial position date but before the end of the subsequent events period are:(a) accounted for similar to errors as a prior period adjustment.(b) adjusted subsequent events, because they are paid from prior year earnings.(c) not adjusted in the current year’s financial statements.(d) recognized on a prospective basis from the date of declaration.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 5MC

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WHICH STATEMENT IS FALSE?A. If the net income of prior period is overstated because of the change in accounting policy, the effect is deducted from the beginning retained earnings.B. Equity is also the net assets.C. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of the prior period is overstated, the amount of the error uis deducted from retained earnings.D. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
Which of the following may not affect retained earnings or earned capital? Correction of prior period errors Gain on reissuance of treasury shares Loss on reissuance of treasury shares Profit or loss for the period
Which of the following does not appear in a statement of retained earnings? a. Net loss b. Prior period error c. Preference share dividend d. Other comprehensive income
Which of the following is not correct relative to an appropriation of Retained Earnings? Question options: a Retained earnings set aside for a special or specific purpose. b Undistributed funds for dividends declared during the year. c Reduction in the amount available to shareholders as dividends d Total retained earnings remains unchanged.
Which of the following is not correct relative to an appropriation of Retained Earnings? a. Retained earnings set aside for a special or specific purpose.b. Undistributed funds for dividends declared during the year.c. Reduction in the amount available to shareholders as dividendsd. Total retained earnings remains unchanged.
1. It represents the cumulative balance of periodic earnings, dividend distributions, prior period adjustments and other capital adjustments. a. Income summaryb. net incomec.dividends d. accumulated profits 2. The date on which liability for dividends must be recorded a. Date of recordb.Date of issuance c.Date of payment d. Declaration date 3. The amount attributable to every share of ordinary share capital outstanding during the period. a. Par value b. Stated value c. Carrying value d. Bookvalue 4. The date which determines who gets the dividend a. Date of payment b. Date of declaration c. Date of record d. Date of issuance 5. How is the treasury share account presented in the Statement of Financial Position? a. deducted from accumulated profitsb. deducted from shareholders’ equityc. part of reservesd. current asset
Dividends in arrears on preference shares are reported in the financial statements as a (an) a. liabilityb. reduction from Retained Earningsc. reduction from Retained Earningsd. expense
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Items directly affecting Retained Earnings include all of the following Except Choices; Non-Current asset held for sale Prior period errors and Effect of change in accounting policy. Dividends declared Appropriation of retained earnings
Using IFRS, 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 current period if it’s not considered practicable to report it retrospectively. d. In the statement of comprehensive income.
A change in accounting policy requires that the cumulative effect of change for prior periods should be reported as an adjustment to: a. Beginning retained earnings for the earliest period presented b. Net income for the period in which the change occurred c. Comprehensive income for the earliest period presented d. Shareholders’ equity for the period in which the change occurred
An audit plan for the examination of the retained earnings account should include a step that requires verification of the (choose two steps)a. Market value used to charge retained earnings to account for a 2-for-1 stock split.b. Approval of the adjustment to the beginning balance as a result of a write-down of account receivables.c. Authorization for both cash and stock dividends declared and paid.d. Gain or loss resulting from disposition of treasury shares.