Problem 11-11

1. Which is the first step within the hierarchy of guidance when selecting accounting
policies?
- Apply the requirements in IFRS dealing with similar and related issue
2. In the absence of an accounting standard that applies specifically to a transaction, what
is the most authoritative source in developing and applying an accounting policy?
- The requirement and guidance in the standard or interpretation dealing with similar
and related issue
3. A change in accounting policy shall be made when

I. Required by law

II. Required by an accounting standard.

III. The change will result in more relevant or reliable information about the financial
position, financial performance and cash flow of the entity
- II and III only
4. Why is an entity permitted to change an accounting policy?
- The change would result in the financial statements providing more reliable and
relevant information about financial position, financial performance and cash flows
5. A change in accounting policy requires what kind of adjustment to the financial
statements?
- Retrospective adjustment
6. A change in accounting policy requires that the cumulative effect of the change for prior
periods should be reported as an adjustment to
- Beginning retained earnings for the earliest period presented
7. Which of the following is accounted for as a change in accounting policy?
-  A change in inventory valuation from FIFO to average method
8. Which is a change in accounting policy?
- All of these are considered change in accounting policy
9. Which of the following should be treated as change in accounting policy?
- A change from cost model to fair value model in measuring investment property
10. When it is difficult to distinguish between a change in accounting estimate and a change
in accounting policy,
the change is treated as
- When it is difficult to distinguish between a change in accounting estimate and a
change in accounting policy,
the change is treated as
Problem 11-12
1. How should the effect of a change in accounting estimate be accounted for?
-  In the period of change and future periods if the change affects both
2. Which characteristic is a change in accounting estimate? / which is characteristics of a
change in accounting estimate?
- It does not affect the financial statements of prior period
 3. Which of the following is the proper time period to record the effect of a change in
accounting estimate?
- Current period and prospectively
4. Why is retrospective treatment of change in accounting estimate prohibited?
- A change in accounting estimate is a normal recurring correction or adjustment
5. Which is required for a change from sum of years' digits to straight line depreciation?
- Recomputation of depreciation for current and future years

Problem 11-13
1. Which is not classified as an accounting change?
- Error in the financial statements
2. When financial statements for a single year are being presented, a prior error should
- Be shown as an adjustment of the beginning balance of retained earnings
3. Prior period errors
-  Are omissions and misstatements in the financial statements of prior periods
4. An example of a correction of an error is a change
- From cash basis to accrual basis of accounting
5. A change from cash basis accrual basis should be reported
- Retroactively as correction of an error

Problem 11-14
1. A change in the periods benefited by a deferred cost because additional information has
been obtained ischara
- An accounting change that should be reported in the period of change and future
periods if the change affects both
2. A change in the residual value of an asset arising because of additional information has
been obtained is
-  An accounting change that should be reported in the period of change and future
periods if the change affects both
3. Which statement in relation to a change in accounting estimate is true?
- Change in accounting estimate results from new information or new development
4. The effect of a change in accounting policy that is inseparable from the effect of a
change in accounting estimate should be reported
- As a component of income from continuing operations in the period of change and
future periods if the change affects both
5. When an entity changed the expected service life of an asset because additional
information has been obtained, which of the following should be reported?
- An accounting change that should be reported in the period of change and future
periods if the change affects both