Reference no: EM132827956

Problem 1: Which of the following is a change in accounting policy?

a. Adopting a new accounting policy for a kind of transaction that was never previously dealt with by the entity.
b. Adopting a new accounting policy for a transaction which occurred in the past but was not material.
c. Adopting a new accounting policy for a type of transaction that was previously dealt with by the entity
d. None of the above.

Problem 2: Material misstatements are considered material if:

a. They aggregate to more than 2% of the entity's turnover for the reporting period
b. They individually influence the economic decisions made by the users of financial statements
c. They individually or collectively influence the economic decisions made by the users of the financial statements
d. They aggregate to more than R5 000 during the reporting period.

Problem 3: What does retrospective application of accounting policy mean?

a. Application of accounting policies from the year in which change in accounting policies happened
b. Application of accounting policies from the immediately preceding year in which change in accounting policies happened
c. Application of accounting policies as if that policy had always been applied.
d. Application of accounting policies without giving effect to the prior period items.