Exam 18: Accounting Policies and Other Disclosures

A company's workforce went on strike for an indefinite period commencing on 28 July 2022. The strike was expected to cause severe financial conditions for the company. The financial statements for the year ended 30 June 2022 were expected to be finalised by 3 August 2022. In accordance with AASB 110 Events after the Reporting Period, the appropriate treatment regarding this event is to:

According to AASB 108, omissions or misstatements are material if they:

Prior to the finalisation of the financial statements for the year ended 30 June 2021, a company experienced a number of material events, including: I. on 15 July 2021 the directors decided to close a division of the company at an estimated cost of $\$ 920,000$ . II. on 18 August 2021 a court decision found the company liable to pay damages of $\$ 350,000$ to a major customer who had commenced legal action in April 2020. III. an independent valuation of property conducted on 29 July 2021 revealed that the directors' valuation included in the 30 June 2021 financial statements was overstated by $\$ 400,000$ . General journal entries to adjust the financial statements will be required for which of the above events?

In determining whether an item is material, consideration must be given to:

Which of the following disclosures are required by AASB 108/IAS 8 for a voluntary change in accounting policy?

Which of the following does not require an entity to use estimates when preparing its financial statements?

Errors can occur for which of the following reasons? I. Mistakes in applying accounting policies II. Misinterpretation of facts III. Mathematical mistakes IV. Fraud

The correction of a material error that occurred in a previous period must be accounted for by:

Which of the following is not required to be disclosed in an entity's accounting policy note?

Bailey Limited has discovered that the estimated useful life for a material depreciable asset is incorrect due to a change in the way the asset is being used. The correct accounting treatment for this event is to:

Events occurring after the end of the reporting period which provide evidence of conditions that existed at the end of the reporting period are known as:

Correcting the recognition, measurement and disclosure of amounts of financial statement elements as if a prior period error had never occurred is known as:

Which of the following statements relating to materiality is correct?

The financial statements of an entity are authorised for issue on: