Correcting the Recognition, Measurement and Disclosure of Amounts of Financial

question 39

Multiple Choice

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

• A) historical restatement.
• B) retrospective restatement.
• C) retrospective application.
• D) prior period application.

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Definitions:

Basis Point

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, equal to 1/100th of 1%.

Bond Prices

The cost or value of a bond, which can fluctuate based on interest rates, credit quality of the issuer, and other factors.

Yields

Yields refer to the earnings generated and realized on an investment over a particular period, expressed as a percentage based on the investment’s cost, its current market value, or its face value.

Debentures

A type of debt instrument not secured by physical assets or collateral but based on the creditworthiness and reputation of the issuer.