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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 1MC: The cumulative effect of an accounting change should generally be reported as an adjustment to the...

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Where financial statements for a single year are being presented, a prior period error recognized in the current year ordinarily would a. Affect net income of the current year. b. Be shown as an adjustment of the affected component of equity at the start of the current year. c. Be included in the statement of recognized gains and losses. d. Be shown as an extraordinary item on the current year's financial statement of comprehensive income.
1. Which of the following would never affect retained earnings? a. Correction of a prior period errorsb. Payment of long-term indebtednessc. Stock dividendd. Reissue of treasury shares 2. Appropriation for accumulated profits, if reflected in separate account, shall be shown as a. Component of equity as part of share premiumb. Component of total liabilities as current liabilityc. Component of total assets as noncurrent assetsd. Component of equity as part of reserves 3. An appropriation of accumulated profits for possible contingencies should be a. Charged with all losses related to that contingencyb. Transferred to income as losses are realizedc. Shown within shareholders’ equity in the statement of financial positiond. Classified in the liability section of the statement of financial position4. When preference share is cumulative, preferred dividends not declared in a period are a. called dividends in arrearsb. Distribution of earningsc. never paidd. considered a liability 5.…
Which of the statements below is false? If the net income of prior period is overstated because of the change in accounting policy, the effect is (A) deducted from the beginning retained earnings. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of (B) the prior period is overstated, the amount of the error uis deducted from retained earnings. Equity is also the net assets. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary D shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
5. The following items affect the retained earnings account, except Group of answer choices a. net income or loss for the period b. prior period errors c. realization of revaluation surplus d. effect of change in accounting estimate
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.
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.
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
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 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.
The cumulative effect of an accounting change should generally be reported as an adjustment to the beginning balance of retained earnings in tin period in which the change is made for a:
Which of the following statement is correct regarding accounting changes that result in financial statements that are effect the statements of a different reporting entity? a.The financial statements of all prior periods presented are adjusted retrospectively. b.No restatements or adjustments are required if the changes involve the cost r equity methods of accounting for investments. c.Cumulative-effect adjustments should be reported as a separate item in the financial statements pertaining to the year of the change. d.No restatements or adjustments are required if the changes involve the cost or equity methods of accounting for investments.