AASB 108 Requires That Changes to Accounting Estimates Be Dealt

question 9

Multiple Choice

AASB 108 requires that changes to accounting estimates be dealt with prospectively.This means that the effect of a past overestimate of doubtful debts expense is:

• A) recognised in the current reporting period
• B) used to increase this periods estimated expense
• C) both A and B
• D) neither A nor B

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Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply at each price.

Elastic

Describes the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Price Elasticity

A measure that describes how the quantity demanded of a good changes in response to a change in its price.

Quantity Supplied

The quantity of a product or service that sellers are ready and capable of offering for sale at a certain price during a designated period.