Requirement 1.
Which of the following items requires a prior period adjustment to accumulated other comprehensive income?
I. Available-for-sale securities were improperly valued last year by $3 million.
II. The prior yearâs foreign currency translation gain of $1.5 million was never recorded.
III. Revenue of $4 million that should have been deferred was recorded in previous year as earned.
a. I, II, and III
b. I and II only
c. I and II only
d. II and III only
Requirement 2.
Choose the correct statement(s) regarding changes in accounting estimates:
I. Changes in accounting estimates generally result from the availability of new information.
II. Disclosure of current period effects is generally required for changes in estimate.
III. A change in accounting principle that is inseparable from a change in estimate is accounted for prospectively, but with footnote disclosure of retrospective effects.
a. I only.
b. I and II only.
c. III only.
d. II and III only.
Requirement 1.
Which of the following items requires a prior period adjustment to accumulated other comprehensive income?
I. Available-for-sale securities were improperly valued last year by $3 million.
II. The prior yearâs foreign currency translation gain of $1.5 million was never recorded.
III. Revenue of $4 million that should have been deferred was recorded in previous year as earned.
a. I, II, and III
b. I and II only
c. I and II only
d. II and III only
Requirement 2.
Choose the correct statement(s) regarding changes in accounting estimates:
I. Changes in accounting estimates generally result from the availability of new information.
II. Disclosure of current period effects is generally required for changes in estimate.
III. A change in accounting principle that is inseparable from a change in estimate is accounted for prospectively, but with footnote disclosure of retrospective effects.
a. I only.
b. I and II only.
c. III only.
d. II and III only.