AC 302 WEEK 8 Multiple Choice Questions

AC 302 WEEK 8 Multiple Choice Questions
IFRS Multiple Choice Question 06
 
 	Your answer is correct
 	 
Is the following exception applicable to IFRS or U.S. GAAP?
“If determining the effect of a change in accounting principle is considered impracticable, then a company should report the effect of the change in the period in which it believes it practicable to do so.”
 	IFRS	 	U.S. GAAP

 
 
  Yes	 	No

 
  Yes	 	Yes

 
  No	 	Yes

 
  No	 	No

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IFRS Multiple Choice Question 07
 
 	Your answer is correct. 
 	 
Is the following exception applicable to IFRS or U.S. GAAP?
“If determining the effect of a correction of an error is considered impracticable, then a company should report the effect of the error correction in the period in which it believes it practicable to do so.”
 	IFRS	 	U.S. GAAP

 
 
  Yes	 	Yes

 
  No	 	No

 
  Yes	 	No

 
  No	 	Yes

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IFRS Multiple Choice Question 08
 
 	Your answer is correct. 
 	 
Detailed guidance regarding the accounting and reporting for the indirect effects of changes in accounting principle is available under

 
 
both U.S. GAAP and IFRS.
 
U.S. GAAP only.
 
IFRS only.
 
neither U.S. GAAP nor IFRS.
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IFRS Multiple Choice Question 09
 
 	Your answer is correct. 
 	 
Ben, Inc. follows IFRS for its external financial reporting. Ben, Inc. owns 25% of the outstanding stock of Black, Inc. and accordingly uses the equity method to account for its investment. Which of the following is true regarding Ben, Inc.'s policies related to Black, Inc.?

 
 
Ben, Inc. will increase the investment account for its pro-rata share of Black, Inc.'s net loss for the year.
 
Ben, Inc. will increase the investment account for its pro-rata share of the dividends paid out by Black, Inc. for the year.
 
Ben, Inc. will conform the accounting policies of Black, Inc. to its own accounting policies.
 
None of these is true regarding how Ben, Inc. accounts for its investment in Black, Inc.

IFRS Multiple Choice Question 10
 
 	Your answer is correct. 
 	 
Ben, Inc. follows U.S. GAAP for its external financial reporting. Ben, Inc. owns 25% of the outstanding stock of Black, Inc. and accordingly uses the equity method to account for its investment. Which of the following is true regarding Ben, Inc.'s policies related to Black, Inc.?

 
 
None of these is true regarding how Ben, Inc. accounts for its investment in Black, Inc.
 
Ben, Inc. will conform the accounting policies of Black, Inc. to its own accounting policies.
 
Ben, Inc. will increase the investment account for its pro-rata share of Black, Inc.'s net loss for the year.
 
Ben, Inc. will increase the investment account for its pro-rata share of the dividends paid out by Black, Inc. for the year.
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