The Statement in Relation to AASB 108 and the Correction

question 24

Multiple Choice

The statement in relation to AASB 108 and the correction of prior-period errors that is incorrect is:

• A) Prior-period errors are material omissions from and misstatements in an entity's statement of financial position and associated notes
• B) The correction must not be included in the profit or loss for the period in which the error is discovered
• C) Comparative figures for prior periods need not be restated
• D) A retrospective correction must be made which will normally affect retained earnings in the current statement of financial position

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Definitions:

Investment

This is the allocation of resources, usually money, in the expectation of generating an income or profit.

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Simple Rate

Simple rate often refers to the straightforward, non-compounded percentage in various financial calculations, such as interest rates.

Salvage Value

The anticipated market price of an asset at the conclusion of its effective life.