Which of the Following Isnot Correct Regarding the Provisions of IAS

question 24

Multiple Choice

Which of the following isnot correct regarding the provisions of IAS No. 8 on accounting changes and error corrections?

• A) Under IFRS No. 8, the recommended approach for a change in accounting principle is that results from prior periods should be restated.
• B) IFRS No. 8 allows a change in accounting principle to be accounted for by reflecting the cumulative effect of the change in the income of the current period without restating prior-period results.
• C) IFRS No. 8 requires that results from prior periods be presented for all changes in accounting principles.
• D) IFRS No. 8 requires a change in accounting estimate to be reflected in the current and future periods.

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Definitions:

Incremental Manufacturing Cost

The additional cost incurred to produce one additional unit of product, including materials, labor, and overhead costs.

Production Increase

An upward adjustment or rise in the amount of goods and services produced by a company.

Prime Cost

The sum of direct materials and direct labor costs in a manufacturing process, not including overhead expenses.

Incremental Manufacturing Cost

The additional cost incurred to produce an additional unit of product, including direct materials, direct labor, and variable overhead.