Which of These Is Not One of the Ways AASB

question 16

Multiple Choice

Which of these is not one of the ways AASB 108 'Accounting Policies' deals with the choice of accounting methods?

• A) By establishing a hierarchy of authorities
• B) By specifying particular policies to be used in certain situations
• C) By specifying the qualitative characteristics that financial information should have
• D) None of the above, i.e., all are ways in which AASB 108 deals with the choice of accounting methods

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Definitions:

Effective Interest Rate

The real rate of interest earned or paid on an investment, loan, or other financial product, accounting for the effects of compounding.

Bank Discounts

An interest deduction from the face value of a note, payable by the borrower at the time a loan is issued.

Reversing Entry

An accounting method used to reverse the impact of certain journal entries made in the previous accounting period for the sake of simplicity in future record keeping.

Interest Accrued

The accumulated interest on a loan or bond that has not yet been paid to the lender.