question archive Which of the following describes a change in reporting entity? a
Which of the following describes a change in reporting entity?
a. A manufacturing entity expands its market from regional to nationwide.
b. An entity presents consolidated financial statements in place of individual financial statements.
c. An entity acquires additional shares of an investee and changes to the equity method of accounting
d. An entity discontinues a product line
During the current year, the entity voluntarily changed its accounting method because the new method will provide more reliable and relevant information. The entity can estimate the effects of the change. How should the entity treat the change in accounting policy?
a. On a prospective basis
b. By restating the financial statements
c. By a cumulative adjustment on the income statement
d. On a retrospective basis
A change in the residual value of an asset depreciated on a straight-line basis arising because additional information has been obtained is
a. A correction of an error
b. Not an accounting change
c. An accounting change that should be reflected in the period of change and future periods if the change affects both
d. An accounting change that should be reported by restating the financial statements of all prior periods presented.
Under IFRS, a change in accounting estimate is accounted for
b. As a cumulative effect of an accounting change in the income statement
c. Currently in the financial statements.
d. Prospectively in the period of change and future periods.
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