ACCC272: IAS 8

The R2000 understatement of inventory in 2012 constitutes…

• An error

• A change in estimate

• A change in accounting policy

The journal which best depicts the correction of error journal in FY2013 is…

• Dr. C.O.S. (p/l) R2000

  Cr. RE (SCE) R2000

• Dr. Inventory R2000

  Cr. Retained earnings (SCE) R2000

• Dr. Inventory R2000

  Cr. C.O.S. (p/l) R2000

Which financial year(s) would be disclosed in the correction of error note?

• 2012 and 2013

• 2012 only

• 2013 only

What would the restated profit/loss for the year for 2012 be after correcting the error?

• (R1640) loss

• R2360 profit

• It would remain unchanged, i.e. R360 profit

What would the profit for the year in 2013 be after correcting the error?

• It will remain unchanged, i.e. R2720 profit

• R4720 profit

• R720 profit

This prior period error will be corrected by…

• Decreasing the o/b of retained earnings with R2000

• Increasing the o/b of retained earnings with R2000

The term “restated profit for the year” will be used for the profit for the year line in the statement of changes in equity for both FY2012 and FY2013 profits.

• True

• False

Prior period errors are corrected

• prospectively

• retrospectively

Changes in accounting policies are accounted for…

• retrospectively

• prospectively

Changes in accounting estimates are accounted for

• prospectively

• retrospectively