1: Which of the following alternative accounting methods is(are) allowed by ASPE and IFRS for reporting accounting changes?

a) prospective and retrospective

b) current and prospective

c) retrospective only

d) current and retrospective

2: Accounting for a retrospective change requires

a) reporting the catch-up adjustment on the current income statement.

b) adjusting the opening balance of each affected component of equity for the current year.

c) adjusting the ending balance of retained earnings for the current year.

d) reissuing all prior financial statements affected by the change.

3: Under IFRS, which of the following disclosures is NOT required for the correction of an accounting error?

a) the effect of the correction on both basic and diluted earnings per share for each prior period presented

b) who was responsible for the error

c) the amount of the correction made to each affected financial statement item for each prior period presented

d) the nature of the error

4: The service life of a building that has been depreciated for 30 years of an originally estimated 50-year life (no residual value) has been revised to an estimated remaining life of 10 years. Based on this information, the accountant should

a) depreciate the remaining book value over the remaining life of the asset.

b) adjust accumulated depreciation to its appropriate balance through retained earnings, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.

c) adjust accumulated depreciation to its appropriate balance through net income, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.

d) continue to depreciate the building over the original 50-year life.