Which of the Following Is Not Correct Regarding the Provisions

question 58

Multiple Choice

Which of the following is not correct regarding the provisions of IAS No.8 on accounting changes and error corrections?

• A) A change in accounting estimate is reflected in the current and future periods.
• B) A change in depreciation method (such as from an accelerated method to the straight-line method)is classified as a change in estimate.
• C) A change in depreciation method (such as from accelerated method to the straight-line method)is classified as a change in accounting principle.
• D) IAS No.8 generally reflects a preference for restating prior results to improve comparability of financial statements.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, examples include rent, salaries, and insurance premiums.

Variable Cost

Expenses that change in proportion to the activity or volume of business, such as materials, labor, and transaction fees.

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life to represent wear and tear over time.

Variable Costs

Expenses that directly fluctuate according to the volume of production or sales.