Prior Period Errors

Question 1

These are omissions and misstatements in the financial statements for one or more periods arising from a failure to use or misuse of reliable information.

Answer 1

Prior Period Errors

Question 2

How should prior period errors be corrected?

Answer 2

Retrospectively

Question 3

If the comparative statements are presented, should the financial statements of prior period be restated?

Answer 3

Yes

Question 4

This means correcting the recognition, measurement, and disclosure of amounts of elements of financial statements as if a prior period error had never occurred.

Answer 4

Retrospective Restatement

Question 5

True or False: The net income, its components, retained earnings, and other affected balances for the prior period presented shall be adjust accordingly.

Answer 5

True

Question 6

What should be disclosed when there are prior period errors?

Answer 6

1. nature of error
2. amount of error
3. amount of correction at the beginning of earliest period presented
4. description of error