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1. The following is an extract from the 20X6 annual report of Status Ltd (Status). Statement of accounting policies Basis of accounting
The financial statements are drawn up on a historical cost basis and, except where stated, do not take into account changing money values and/or current valuations of non-current assets.
Changes in accounting policies
During the 20X6 financial year, Status voluntarily changed its policy on accounting for inventory. This did not materially affect the 20X6 financial statements, but will have a material impact on the financial statements in subsequent reporting periods.
In addition to the above accounting policy details, what must the accountant for Status include as disclosures? Select which two options are correct.CorrectIncorrect
2. In preparing the 20X4 financial statements of Medal Ltd (Medal), there was a voluntary change of accounting policy in relation to inventories. The accountant for Medal noted that this change would not require any adjustment in the financial report for the reporting period ending on30 June 20X4. However, the accountant considered that the change in accounting policy would have a material effect on the subsequent reporting period.
In accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, which one of the following actions should be taken when preparing the financial report for the year ended 30 June 20X4?CorrectIncorrect
3. In preparing the accounts of Oscar Ltd (Oscar) for the financial year ended 30 June 20X7, the following items were considered. In accordance with IAS 1 Presentation of Financial Statements, IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IAS 10 Events after the Reporting Period, which of the following items would be included in the determination of profit after incometax?
Select which three options are correctCorrectIncorrect
4. Change in accounting policy does not include:CorrectIncorrect
5. Prior-period errors, including fraud, should be corrected:CorrectIncorrect
6. Specific principles bases conventions rules and practices applied in presenting financial statements. This defines:CorrectIncorrect
7. Adjustment of the carrying amount of an asset or a liability or the consumption of an asset. This definesCorrectIncorrect
8. Changes in accounting policies:CorrectIncorrect
9. If it is impractical to make a retrospective application to a period:CorrectIncorrect
10. The term “accounting policies” refers to:CorrectIncorrect
11. 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?CorrectIncorrect
12. An entity may change one of its accounting policies:CorrectIncorrect
13. A change in accounting policy which does not result from the initial application of an international standard must normally be accounted for:CorrectIncorrect
14. For all changes in accounting policy, the entity concerned must disclose:CorrectIncorrect
15. A change in an accounting estimate should be accounted for:CorrectIncorrect