Reference no: EM132952636

Problem 1: Purchasing power gain or loss results from which of the following: I. Monetary assets and liabilities II. Nonmonetary assets and liabilities

Option 1: Both I and II

Option 2: I only

Option 3: II only

Option 4: Neither I nor II

Problem 2: Which of the following is a non-adjusting event requiring disclosure?

Option 1: Retirement of key officers

Option 2: Settlement of a litigation when the event that gave rise to the litigation occurred prior to reporting date

Option 3: Employee strikes

Option 4: Issue of a large amount of share capital

Problem 3: Failure to record a liability probably will

Option 1: Result in an overstated profit.

Option 2: Result in overstated total liabilities and owners' equity

Option 3: Have no effect on profit.

Option 4: Result in overstated total assets.

Problem 4: When it is difficult to distinguish between a change in accounting estimate and accounting policy, an entity shall:

Option 1: Treat the entire change as a change in accounting estimate with appropriate disclosure.

Option 2: Apportion on a reasonable basis the relative amounts of change in accounting estimate and the change in accounting policy and treat each one accordingly.

Option 3: Treat the entire change as a change in accounting policy.

Option 4: Ignore it in the year of change.