21) Which of the following requires an adjustment to the opening balance of retained earnings in the earliest

period of the comparative financial statements presented?

A. A change in the estimated useful life of machinery.

B. A change in the expected residual value of a property.

C. A change from straight line to declining balance depreciation.

D. A change from first-in, first out (FIFO) to weighted average inventory cost flow assumption

22) Significant accounting policies may not be

A. Selected on the basis of judgment C. Unusual or innovative in application

B. Selected from existing acceptable alternatives D. Omitted from financial statement disclosure

23) Prospective application of recognizing the effect of a change in an accounting estimate means

A. Recognizing the effect of the change in the accounting estimate in the current and future periods affected

by the change.

B. Applying a new accounting policy to transactions, other events and conditions as if that policy had always

been applied.

C. Correcting the recognition, measurement and disclosure of amounts of elements of financial statements

as if a prior period error had never occurred.

D. Any of the above.

24) A change in accounting estimate is

A. An adjustment of the carrying amount of an asset or liability, or related expense, resulting from

reassessing the expected future benefits and obligations associated with that asset or liability.

B. A change in the specific principles, bases, conventions, rules and practices applied b an entity in

preparing and presenting financial statements.

C. Omission from, and misstatement, in an entitys financial statements for one or more prior periods arising

from a failure to use, or misuse of, reliable information that was available and could reasonably be

expected to have been obtained and taken into account in preparing those statements.

D. All of the above.

25) A change in accounting estimate is accounted for by

A. Prospective application C. Retrospective restatement

B. Retrospective application D. Any of the above