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Synthesis Exit Interview @ 79 wpm, you can finish this in 5 minutes.

Dagdagan nyo pa ng mga good morning sir pol. The sun is warm and the grass is green. #14. How are accounting errors corrected? (Before moving on to answer the question, I think it is prudent to give a brief) Introduction Errors can occur in the recognition, measurement, presentation or disclosure of elements of financial statements in an accounting period. Once discovered, they are promptly corrected before the financial statements are authorized for issue. However, there are material errors that are not discovered until the next accounting period. Such errors are called prior period errors. Prior period errors omissions from and misstatements in the entitys financial statements for one or more periods arising from a failure to use or misuse of reliable information that: a. Was available when the financial statements for these periods were authorized for issue b. Could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. PPE include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretation of facts, and fraud. Treatment (WHERE ANSWERS TO THE QUESTION ACTUALLY BEGIN) PAS 8 provides a retrospective correction of material prior period errors in the first set of financial statements authorized for issue after their discovery by: a. Restating the comparative amounts for the prior period presented in which the error occurred. b. Restating the opening balances of assets, liabilities, and equity for the earliest prior period presented if the error occurred before the earliest period presented. Such errors are narrowed down to three (3) classifications: a. Statement of financial position errors b. Income statement errors c. Combined statement of financial position and income statement errors SOFP errors affect only real accounts. It involves simple misclassification of an asset, liability, and/or capital account. It is treated by a simple adjusting entry. IS errors affect only nominal accounts. It involves simple misclassification of revenue (En vez sales, other income) or expense accounts (en vez rent expense, interest). It is likewise treated by a simple adjusting entry.

CSOFPIS errors affect both the SOFP and IS because net income is misstated. These are also narrowed down into two (2) classifications: a. Counterbalancing errors b. Non-counterbalancing errors CB errors can be treated by simple lapse of time because they are automatically counterbalanced or corrected in the next accounting period. NCB errors are not automatically counterbalanced, and, therefore, require adjustments. Otherwise, the statement of financial position of the year of error and the subsequent years are incorrect until the error is corrected.